Buying a home for the first time can be frightening and time-consuming. But if that’s difficult, buying your next property can be even more complicated. If you’re selling your current home and buying a new one, juggling the finances can be troubling. When is the right time to sell and can you match it up with the right time to buy? Should you buy or sell first, or perhaps even try to do both at the same time? And how easy is it to get a mortgage for your new home if you haven’t sold your old one yet? If you’re about to deal with the finances of buying and selling a home around the same time, here are some things to consider.
Choosing the Right Time
Getting the right time to find a new home can be hard. You need to work out what will be best for you financially and when you’re going to have your pick of buyers or properties. The problem is, the best time to sell and the best time to buy are unlikely to match up. You might want to maximize your profit on your current home while saving on your new one or perhaps having your pick of a larger pool of property. Doing both of these at the same time might not be possible. If you need to choose one, go with the best time to sell. It will give you a good idea of what position you’re in to buy.
Buy or Sell First?
One of the biggest decisions is whether you should sell your current home or buy a new one first. If you sell first, you can get your financial ducks in a row for your new property. But if you’re unable to buy somewhere before your move-out date, you could waste money on a rental. If you buy first, you could end up juggling two mortgage payments while you wait for your old property to sell. And you don’t know if it might take a lot longer than expected for you to find a buyer. You could even end up having to rent it out. Many experts will say that selling first is best.
Bridging a Gap
When you’re trying to buy and sell properties at the same time, it can leave a gap in your finances. If you want to buy your new home before completing the sale of your old one, a bridge loan could help you out. This short term loan, available from companies like Enness Bridging Finance, is designed to cover the cap in your finances before you sell. You can use it as a down payment on your new property before you’ve unlocked the equity from your old home.
Getting a New Mortgage
Of course, you need a mortgage for your new property. If you want the best chance of securing one, selling your home first is often best. Lenders may be more confident about lending to you, and you won’t have to handle two mortgage payments at the same time.
It’s hard to buy and sell property simultaneously, but it’s easier on your finances if you prepare. Give it some thought to help yourself stay organized.
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