If you currently own a home and you’ve found your perfect next home. There may be a problem… You haven’t been able to sell your old house yet. How do you overcome this obstacle? In this article, I hope to help you find a solution to move if your house hasn’t sold yet in IN.
Moving can be hard when you are attempting to buy and sell a home all at once. All Lenders are going to have guidelines from VA, USDA, FHA, Fanny Mae, and Freddie Mac about taking out another mortgage while you still own a home. If this is the position you find yourself in, there are a few hurdles to overcome before moving forward.
How to Move if Your House Hasn’t Sold Yet in IN
First off, to qualify for a second home mortgage on another home, you must meet certain qualifications.
Start by contacting a loan officer. This is step one. Purchasing another home before your home has sold is done by others every day throughout Indiana. However, you need to start with the money. Ask around for a referral to trusted loan officer. They will want to pull your credit and review your income. Each lender will have set guidelines from VA, USDA, VA, or Freddie and Fannie. Many will also have their own guidelines that are even stricter than those guidelines. It is possible to move if your house hasn’t sold yet in Indiana, but doing so will require some research before getting started.
Restriction for moving if your house hasn’t sold yet will almost certainly include being able to afford both mortgages. Most lenders will have a debt to income guideline they have to follow. Many will also require that you have a certain amount of equity in the home you currently own. These are common along with requiring a down payment on the new home. Regardless of when you want to move if your house hasn’t sold yet, starting with a loan officer is step one.
Asking family can be another route, so long as you put everything in writing.
If getting a loan from a bank or credit union isn’t for you, then asking a family member is another option. Agree to pay them back in full upon the sale of your first house. Whenever you borrow money from family, you want clear terms to be set and adhered to.
Be careful with this route as a family relationship could be wrecked because of money. It may not be a good route for you to move if your house hasn’t sold yet if it ruins your relationships. If this is your position, you may want to look for a different approach to secure the financing you really need.
A bridge loan or as it’s sometimes called, a “wrap” loan can help “bridge” the gap while you attempt to cover two house payments.
A bridge loan is when a lender loans on your current home equity. For example, if you owe $100,000 on your current home and it is worth $200,000, they may loan the difference to buy the next home. This is short financing to bridge the gap from where you are to where you are going. Typically they come with interest-only payments. These are typically short-term loans, lasting 6 months to one year. This allows you the time to sell your current home when you want to move if your house hasn’t sold yet.
Lenders have different requirements, but you must typically have good credit and be financing less than 80% of the value of both houses.
While it may not be your first choice, you can talk to your boss or plan administrator about borrowing from your 401k.
Make sure you know how the tax penalties will operate, and pay yourself back after the sale of the original home. This may not be an option for everyone, but definitely, something to look into.
Try to offer the seller of the second home, the option to rent it back from you for a few months.
Depending on their situation, they might love the idea of being able to stay in their home while they shop for a new one. If you are attempting to carry two mortgages, this is a good solution to alleviate the cost. Buying the home and then renting it to the current owner is a creative way to afford both mortgage payments while you sell your current home. Doing so will allow you the time you need to sell your home without the expense of carrying two mortgage payments.
Add in a contingency in your offer allowing you to close on the new home, only after your home has sold.
Many times if you want to move even though your house hasn’t sold yet, adding the contingency that selling your current home first before closing on the new home is a common solution. This allows you to get the new home under contract while you are marketing your current home for sale. The seller would not be able to sell the home to another buyer before getting out of the contract with you. Most times this comes with a concrete date to close on the new home. Using this strategy to buy your next home is done regularly in the Indiana Market. If your home is new to the market and priced fair, it should sell right away. Present this to the owners of the home you want to purchase will make sure that you have a house to move to when you sell your home. Ensure them that the closing won’t be delayed and that you agree to close in a certain amount of time.