Can I Buy a House Before I Sell My Current Home?

You found the house you want to buy, but there’s one problem: you still own your current home.

Do you have to sell first?

Not necessarily. It may be possible to buy your next home before selling your current one, depending on your finances, available equity, and the mortgage options you qualify for.

For homeowners who are ready to move, understanding your options before listing your current home can make the transition much easier.

Can I Qualify for a New Mortgage Before My Current Home Sells?

Possibly.

One of the first things your Loan Officer will look at is whether you can qualify while you still have a mortgage payment on your current home.

Your income, existing debts, available assets, credit, and the amount of equity you have in your current home can all play a role.

If carrying both homes temporarily isn’t an option, that doesn’t automatically mean you have to sell first. There may be other strategies worth exploring.

What Is a Bridge Loan?

A bridge loan is a short-term financing option designed to help homeowners “bridge” the gap between their current home and their next one.

Depending on the program and your situation, a bridge loan may allow you to access some of the equity in your current home before it sells.

Those funds could potentially be used toward the purchase of your next home, allowing you to move forward without waiting for your current sale to close.

Once your existing home sells, the bridge loan is typically paid off according to the terms of the loan.

Why Would Someone Buy Before Selling?

For many homeowners, it’s about making the move easier.

Buying first may give you more time to find the right home instead of feeling pressured to purchase something simply because your current home sold.

It can also help you avoid trying to coordinate two closings on the same day, moving everything at once, or finding temporary housing between homes.

In a competitive housing market, it may also allow you to make an offer without a home-sale contingency, depending on your financing and situation.

What Are the Risks of Buying First?

Buying before selling isn’t right for everyone.

For a period of time, you could be responsible for expenses associated with both properties. You’ll also need to consider what happens if your current home takes longer to sell or sells for less than anticipated.

That’s why it’s important to understand the numbers before making an offer on your next home.

Your Loan Officer can help you look at different scenarios so you know what the transition could realistically look like.

Should I Sell My House First or Buy First?

There’s no universal right answer.

Selling first may make sense if you need the proceeds from your current home to purchase the next one or want to minimize financial risk.

Buying first may make sense if you have sufficient income, savings, or home equity and want more flexibility when searching for your next home.

The best strategy depends on your finances, your local housing market, and what matters most to you during the move.

Start With the Financing Before You Start House Hunting

If you’re thinking about selling and buying at the same time, don’t wait until you’ve found your next house to figure out the financing.

Michigan Mortgage can help you understand how much equity you have, what you may qualify for, and whether options like a bridge loan could help you make the move.

There may be more than one way to get from your current home to your next one. Let’s find the one that makes the most sense for you.