The average homeowner usually doesn’t have thousands of dollars on hand to buy a second house. Therefore, buyers who already own a home often depend on the profits from their first home’s sale.
But what if it’s not possible to sell your home before you buy a new one? How can you purchase a home if you already have a mortgage? Check out these inside tips so you can confidently explore some great houses for sale
1. Make the Contract Contingent on the Sale of Your First Home
If you know that your current salary won’t qualify you for two mortgages, then get approved for just your future mortgage. You can get your mortgage provider to prequalify you for your new mortgage only if your first home sells. You can also have your agent insert a safety clause into the sales contract that enables you to back out of the deal if your first home doesn’t sell.
2. Draw out An Equity Line of Credit
If you need to hold on to your first home instead of selling it, you can take out the profits you would make on the home right now from its equity. This money will be a second lien and will need to be paid off over time. Talk to your loan provider to find out if this could be an option for you.
3. Use a Cash-Out Refinance
This is like taking out a home equity loan, but instead you are turning your home’s equity into cash. To put it simply, a cash-out refinance gives you the money to pay for closing costs, pays off your first mortgage, and begins a new refinanced mortgage for your second home.
To find a great home in Richland, Washington contact us at Retter & Company Sotheby’s International Realty.