Are you looking to buy and sell your existing home at once, but lack the cash flow for both transactions? You aren’t alone if this is you – we have seen this issue arise in our business time after time. Here are some tips from a seller’s perspective on closing deals:
Do You Need a Cash-Out Refinance
A cash-out refinance is exactly as its name implies: you borrow money against your home to cover the down payment and closing costs for buying another property. In this scenario, the lender pays off any existing mortgage loan that needs to be paid off in order to close on the purchase. This strategy works best when buying a home that costs more than what you currently own – in that case, pulling equity out of one home and investing it into the other makes financial sense; if moving into something lower priced housing, however, paying off an existing mortgage may not make financial sense in this scenario. Looking for a quick and easy way to sell your house for cash? Click here: https://www.as-ishomebuyer.com/sell-my-house-cash-memphis-tn/.
Get Cash From Your Bank or Credit Union
If your bank or credit union will allow you to borrow money without a 20 percent down payment, then it could be possible for you to expedite the purchase of your new property and close on it simultaneously with closing on your current house. This option makes sense if you can negotiate a low interest rate due to an established relationship with the lender.
Get Assistance From Your Real Estate Agent
A good real estate agent can assist you in finding a way to obtain cash for home-selling purposes. Agents frequently network with other professionals and may be able to offer insights that you hadn’t considered. They may know of someone who needs to sell a house quickly but doesn’t require as much as it’s worth. Plus, your agent has access to financing sources not available through traditional lending channels.
Ask a Family Member for Assistance
Are you in need of financial assistance from friends or family members? A spouse, child, sibling, parent or grandparent could potentially loan you the cash for your down payment and closing costs. In some cases, personal loans secured by your current home may be possible; if not, expect to put some equity into the new house as well.
Finding a Bridge Loan
If you can’t get a cash-out refinance, you may be eligible for a bridge loan from either your lender or another external source. Unfortunately, they cannot extend the loan beyond 30 years without conducting an appraisal, so the term of the loan would be shorter and the interest rate might be higher than with a traditional home mortgage.