Creative Ways to Buy Your Next Home Before Selling Your Current One

In today’s low-inventory market, an offer contingent on selling your current home can be less attractive to sellers and might even force you to pay a premium. Many buyers assume they must first sell their home to qualify for a new purchase or secure a down payment—but that’s not necessarily true. There are several creative financing options available that allow you to buy a new home, before selling. Consider these strategies:

• Home Equity Loan:
  Set up a home equity loan on your current property and use those funds for the down payment on your next home. These loans often come with little to no cost, although they typically take up to 30 days to secure.
• Cash-Out First Mortgage Loan:
  Take out a new loan on your existing home or rental property. This loan can be structured with minimal cost and repaid after you sell your current home.
• Secured Loan Against Your Investments:
  If you hold non-retirement investments at a financial institution, you might qualify for a line of credit secured by these assets. You could potentially borrow up to 50% of your investments’ current value—often a better option than selling investments and incurring capital gains tax.
• 401(k) Loan:
  Borrowing from your 401(k) is another option, with the benefit that the interest you pay goes back into your account. Typically, you can borrow up to 50% of your 401(k) balance, up to a maximum of $50,000.
• Loan from Family or Friends:
  A personal loan from family or friends can be a win-win. It may offer a lower interest rate than traditional bank loans, while still providing a return for the lender. To provide extra security, the loan can be secured against your current home.
• Bridge Loan:
  A bridge loan is a short-term solution secured against the equity in your current home. Although these loans may carry slightly higher costs than a home equity line, they often offer easier qualifying criteria.

There are many ways to make your new home purchase work without selling your current property. It’s all about planning and finding the option that best fits your unique situation. If you’d like to explore these options further or discuss which strategy might be ideal for you, please reach out. I’m here to help you achieve your real estate goals.

Bryan Wallpe

Mortgage Advisor - Team Lead

NMLS 290807

Office  (775) 833-7111

Mobile (775) 690-9900

Email – bryan@mortgageupside.com

Mortgage Upside

Powered by: NEXA Mortgage

264 Village Blvd. Suite 2B

Incline Village, NV 89451