Sometimes, owning two homes is a life goal, a primary residence you call home, and a cozy vacation cottage or lake house to escape to. But owning two homes at once can be an unwanted and scary proposition for folks in the process of selling their current home while looking to purchase a new one. The burdens and carrying costs involved in owning two properties – two mortgages, two insurance premiums, two sets of taxes, etc. – can make people think that they need to wait to sell before they can buy. Additionally, paying for needed upgrades, repairs, and staging while also finding the funds to pay for a down payment is often not feasible.
So, should you wait to sell your home before you purchase a new one? Not necessarily.
Market conditions, personal needs, and creative resources like Compass Bridge Loan Services can weigh in favor of buying before you close on your current home.
When Selling Before Buying Makes Sense
Unquestionably, selling your existing home before buying a new one has some advantages. Depending on your circumstances, the following factors may weigh in favor of holding off on your purchase until you close on your current home:
- No rush. While other factors may make you highly motivated to sell as soon as possible, not feeling the pressure to sell quickly because you have extended yourself with the obligations of your new purchase can afford you the luxury of time and prevent you from accepting a low offer out of perceived necessity.
- Stronger offer. The offer you make on a new home will lose some of its power and competitiveness if you need to make it contingent on the sale of your own house.
- Greater financial certainty. The kind of home or neighborhood you can afford depends on your available financial resources. By selling first, you will know exactly where you stand when making an offer.
- One mortgage is tough enough. Not only is paying two mortgages at once a financial strain, but your existing mortgage obligation may make financing your new purchase difficult.
When Buying Before Selling Is Preferable
Sometimes, an ideal home is listed during a competitive market where buyers need to strike quickly or lose the opportunity. Perhaps a job or other factors make it necessary to relocate in a hurry. In such cases, buying before you sell may be the required, if not preferable, way to go.
But if all of your equity remains tied up in your existing home, which you have yet to sell, you may not have the cash you need to make an offer, provide a down payment, or make initial mortgage payments. Additionally, living in your existing home while potential buyers regularly are coming and going can be burdensome and overwhelming.
For folks who want or need to buy a new home before they sell their current one, many of the traditional obstacles to doing so can be addressed with a bridge loan. At Compass, we provide a simple, reliable solution that can get you into the Chicago home you want while you’re trying to sell the home you have: Compass Bridge Loan Services.
Compass Bridge Loan Services
As the name implies, a bridge loan bridges the gap between buying a new home and selling an existing one. It is a short-term loan that uses the equity from your current home to provide you with the funds you need to make an offer on a new one. With a bridge loan, you have the freedom to move on your own terms and secure a new house when you need to, without having to wait for your old home to sell.
Additionally, a bridge loan can allow you to move out of your house before it undergoes any construction or repair work needed to facilitate its sale, sparing you from the inconvenience and disruption involved if you were still living there.
To make bridge loans even more accessible and affordable, we offer qualifying clients Compass Bridge Loan Advance.
When you work with a Compass agent to sell your current home, you can get up to six months of your bridge loan payments and other associated costs fronted — an exclusive offering for Compass clients, regardless of your lender.
Compass Bridge Loan Advance has a 0% APR for the life of the loan and has no additional application or closing fees. The advance can equal up to six months of monthly payments and eligible closing costs incurred from the bridge loan. Eligible closing costs include: (1) the dollar value of any points paid upfront, (2) origination or application fees where applicable, and (3) appraisal fees.
If you need to move into a new home faster than a buyer moves into your old one, Compass Bridge Loan Solutions and Compass Bridge Loan Advance offer an ideal solution. Please contact us to learn more about how we can help.