What happens if you find the dream Staten Island property that you want to buy, before you have made the sale on your old property? Ideally you would have sold your current home before you buy your new property. However, sometimes the transition doesn’t work out that way. You don’t want to give up the sale if you have found a bargain on your dream house, so is it possible to buy the property before you have made the sale?
The answer is yes, it is possible. You will need to find a financing option that will allow you to secure your next home before you have sold your existing property.
Getting a Bridge Loan
One option is a bridge loan. This is designed to wrap your payments for your current home and your future home into one loan, which can last usually between six and twelve months. The rates for these types of loans are usually higher than a standard first mortgage.
This type of loan usually involves a small fee and you will also be responsible for the closing cost on the mortgage on your next home.
Borrowing From Your Retirement Fund
Another option that might work is to borrow from your retirement fund, if your company allows it. In this situation, you will be able to borrow the money and then repay it right away when you sell your home. Of course, make sure you find out the rules on this first so that you are not at risk of incurring any penalties with the IRS.
Taking Out a Personal Loan
Another possible option is to take out a personal unsecured loan. Keep in mind, these types of loans usually have high interest rates and they will only last for a few years. Also, you will need to include the payments that you are making on that loan when you are qualifying for a mortgage on your next home.
Advantages to Buying Before Selling
One thing to keep in mind is that if you buy a new house before selling your old one, you will save yourself from a period of transition when you are between homes (which can be very inconvenient). Also, you will only need to hire a moving company once and you won’t have to put anything into storage, which will save you money.
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