What if you want to buy a new home before you sell your current one? Say you want to keep your existing property as a rental property. For certain loan programs, that’s acceptable if you have a lease drawn up ahead of time. (For some loan programs, that may be trickier.)

You may have other reasons for waiting to sell your current home. Say you want to hedge your bets against the housing market you want to buy into. Say you’re waiting for the perfect buyer. Whatever the reason, it is possible to keep your current home while purchasing a new one.

Do you qualify?

As lenders, what we’ll do is see whether you qualify for both mortgages at once. As always, this is to do with the relationship between your debt and your income. We’re looking at whether you can qualify for the debt of two homes in relationship to your gross monthly income.

If you qualify

If you do qualify, we’ll go ahead and start the mortgage process for a new home while you’re getting your current house ready to sell. We’ll ask whether you’ll need the equity from your current house to use as the downpayment on the new house. If the answer is yes, we’re going to need to figure out creative ways to help you access that equity. This could be through a short-term loan or a home equity line.

If you don’t qualify

If you cannot qualify for both house payments, don’t worry — there is still a way. We often encourage our clients to go ahead and make an offer on the new house. However, you would stipulate that the offer is contingent upon the sale of your existing home before you close on the new house.

Timing the closings

The closings on both houses can take place almost simultaneously, as long as the execution of the selling documents is done first, and the purchase documentation is done second. That can usually be accomplished with the same closing attorney or title company and be completed back to back within an hour of each other.

For more about holding two mortgages at once, applying for one mortgage, or anything else related to home financing, call us at (205) 986–4220, get online, or find us on social media. We’re happy to answer any and all questions.

— Ben Chenault,
Certified Mortgage Planner
NMLS# 130305
MortgageBanc / Fairway Nmls# 2289

Fairway Independent Mortgage Corporation is not a credit counseling agency and will not provide credit advice. Please consult a professional regarding your specific credit situation.

Copyright©2019 Fairway Independent Mortgage Corporation doing business as MortgageBanc. NMLS#2289.4750 S. Biltmore Lane, Madison, WI 53718, 1–866–912–4800. All rights reserved. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply. Equal Housing Lender. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, License No 41DBO-78367. Licensed by the Department of Business Oversight under the California Finance Lenders Law, NMLS #2289. Loans made or arranged pursuant to a California Residential Mortgage Lending Act License. Georgia Residential Mortgage Licensee #21158. Licensed Nevada Mortgage Lender.

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