If you are currently an owner of a house but want to move, have you decided to buy a house before selling the one you have? This is one way to handle moving to a new house, but it is a method that may be somewhat challenging for you. It is still possible, though, to buy a house before you sell the one you are in, and here are some tips to help you do this.
Secure a preapproval for a second loan before shopping
A common challenge people face in this situation is securing a mortgage loan for a second house if they already own a house. Lenders will look closely at your income and finances to determine if you could afford to pay two mortgages at this time. If your budget and finances do not prove that you could, it might be hard to get a loan before selling your house. If you can get preapproved for a second mortgage, then you may want to proceed with buying a house before you sell yours. If not, you may want to use a home sale contingency instead.
Use a home sale contingency
A home sale contingency is something you put on a purchase offer of the house you want to buy, and it tells the owner of this house that you have a house to sell before going through with the closing process of this second house. Using this option eliminates the need to have two mortgages at once, but it is not the type of contingency that home sellers look favorably upon. In fact, many home sellers would not accept an offer like this, but some will.
Make a plan for your current home if you buy before you sell
If you have a preapproval for a second loan and decide to go through with the purchase of a second house before selling, it is important for you to create a plan of what you will do with your first house if you cannot sell it quickly. For example, you could choose to rent it out, or you could choose to significantly lower the price to make sure you find a buyer for it.
It is usually easier if you sell before you buy, but it can be more convenient to buy first and then sell. Both options have challenges, and you can learn more about all the options you have when buying a home by visiting a real estate agency.