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18 Oct

What to do if you’ve purchased a new house but your current home has not yet sold…

General

Posted by: Trish Pigott

This blog post is coming from a scenario we actually encountered this week.   We had some stressed clients, who purchased a new property and had no doubt that their current home would sell! The current home still has not yet sold but we were extremely happy to reassure them with a number of solutions for this situation.  A couple solutions brought to the clients attention were:

  • Equity take out on the current property, as bridge financing is not an option without a firm sale
  • Short term second mortgage
  • Add a co-signer to afford both properties

Key points for you to consider if you are put in this situation:

  • Do you qualify to carry two properties and two mortgages?
  • Do you have access to other funds for the down payment such as gifted funds from family or saving?
  • If a refinance is needed on current home, the listing will have to be cancelled as banks will not offer traditional lending rates on homes that are currently listed

As a result, to complete on time I was able to secure financing for them with fully discounted rates, use rental income to qualify, put 50% of the mortgage portion on the new property in a line of credit. That way it is fully open, so when their home sells there will be no penalty to pay down the line portion of the new mortgage.

If you happen to find yourself in this position – please do not hesitate to contact us here at the office and we will help you!