We can’t always predict or prepare for certain life situations. There may be circumstances that arise that force someone to put their home on the market and move their life elsewhere, like relocating to another area due to a job promotion. Unfortunately, we do not have control over the housing market, nor can we anticipate the duration of time it will take to sell a home.
If you have to purchase another home and your previous home still hasn’t sold, there are a few ways that you can try to shoulder a bit of that weight. The majority of us are unable to pay for two mortgages at once. Also, people that buy a new home often use the money they receive through the sale of their previous home to help them pay for the hefty upfront costs, like their down payment. Here are some strategies to follow if this applies to your current situation:
Work with the seller of the home you want to purchase.
This is not something that happens very frequently, but occasionally, a deal can be made with the person you are looking to buy your new house from. If there is any way you can work it out so that your offer can be accepted but the closing costs wait until you sell your current home, that would be the best-case scenario for you. This will be less likely to happen if there are multiple offers that are being put down on the house – and a deal like this requires good communication between both real estate agents – but it is possible.
Utilize your home’s equity.
If you are a good candidate – meaning that you have a good credit score and some equity in your home – you could try to get a home equity line of credit (HELOC). This loan could help you immensely, but, if you plan on using this as an option, it’s important that you start looking into it before it’s necessary to use. You want to make sure that you have all of the math figured out in advance. If you are utilizing too much of your home’s equity, it could damage your chances of getting a mortgage for the home you’re looking to buy. Also, you want to make sure that you pay the loan off immediately because they tend to have very high interest rates.
These are two strategies that could help you as you maneuver this complicated process. It may not completely eradicate the financial struggle of being stretched thin, but they will help to ensure that you aren’t completely in a bind.