how do you go about buying a house before selling your current house

We put in an offer which was accepted to purchase a home contingent on the sale of our old home. We put the offer in in May with a deadline of the sale for our home being done by sometime in November (we live in a small town and figured it'd take a while to sell). We listed our home two weeks after purchase agreement was signed as we needed to do a few things to get it sale ready.

Got an offer on our home 2 weeks later; used the same agent to buy/list and he coordinated things along with our bank. We actually sold our home on a Wednesday and then closed on the new home on Friday. The buyers of our home actually agreed to about a week I think it was to get out things out and the house cleaned (people in our NEW house had to get out before we could get in obviously).

Two ways to go about it if you are looking to get a loan for it. First you can try and see if you can qualify carrying both houses. Since you own the current house Free and Clear, the costs that will be added to your ratios are current homes taxes, insurance, and HOA( if you have one.) Plus the prospective house's PITIA. Qualifying this way allows you the flexible to offer without a contingency and sometimes are more likely to get your offer accepted from the seller. However, the problem with this method is many people have a hard time coming up with the equity for the down payment because the assets they want to use are tied up in their current home.

The second way to go about it is place an offer on a home you want to buy with the contingency of a sale of your current house. Your realtor should be able to help you with this and many times they can schedule a back to back closing within the same day.

Then see if you can get qualified income to debt ratio wise by your lender to "carry" both houses if you want the flexibility to buy a house before yours is sold.

Tell us how you really feel poops at parties.

Get a bridge loan with equity in current house

Bridge financing is one option. I'd recommend against trying to float two re purchases without first looking through your paperwork. If you can somehow float two at a time so to speak, some mortgage companies will insert verbiage into the mortgage within a clause that makes you attest that this will be your primary residence and that you are going to live in it (that it will be owner-occupied property in other words).

Some of these clauses give the lender the discretion to call the balance due in extreme cases or sometimes provide for a lesser but still craptastic penalty of sorts for not occupying the property.

Not trying to scare you mind you, just making you aware of the stuff that's out there. If you've got your original closing paperwork from the house you're in, pull out the actual mortgage (not the note) and read through it. It's the longer document (the note is fairly short and sweet). Make sure you don't have any call options inserted in favor of the mortgagee (the lender).

It's not prevalent but its worth checking out just in case. A lot of lenders sell these mortgages after one-and sometimes before-payment is made so you need to educate yourself as to what the contractual obligations are that you're operating under.

If you don't have that stress, I'd still ask my new potential mortgage broker whether or not you're paying a penalty in terms of basis points on your rate because of your Debt-To-Income Ratio (DTI Ratio) being high. Simply put: If you have two house notes then the DTI is going to be higher than it would be with one (normal conditions for you). Higher DTI's often-and almost always-mean a higher interest rate %. Which means a higher house note.

Even though its only for a short period of time that you'd have that DTI, it could punish you for an extended period moving forward with the new house's note.

Just some food for thought. I'd plan like this:

1.) List my home ASAP.
2.) Go find a month-to-month apartment like over at Jimmy Swaggart Ministries (approximately $500-600 for a furnished-if crummy-apartment that's a backup plan in case you are homeless for a short period and need a place)
3.) Find a mortgage broker and get pre-qualified and ask him to put in writing what the difference in rate is if you were to scrub the current house note from your DTI calculations.
4.) Put in offers.

I would insert into #4 to make them contingent on your own home's sale but that turns sellers off bigtime. You can still walk away from your financing option due to dissatisfaction due to the interest rate (which is talked about in #3 above) and be covered by the generic "due diligence," clause in most purchase agreements. Read through it and you'll see what I'm talking about.

Happy Hunting and Good Luck. Remember this is what I'd do...and as always, Your Mileage May Vary (YMMV).

If you own your current place outright and have money for a downpayment outside the sale of your current home, I'd just treat it like buying a new place normally. Then just sell your house and use the principle to pay off your mortgage.

The only thing for you to decide is when to list your current house. If you are confident it will sell fairly quickly, then just wait to list it until you find a new home that way you don't have to find a temporary place to live.

1.) Buy Tinyhouse
2.) Park on Lot
3.) Tell HOA it's for Construction Superintendent for your Build
4.) Move fam to In-Laws
5.) ???
6.) Profit

LsuVegas - shoot me an email. I am looking to buy in the area and would love to come look at it. Maybe i can make it easy for you, we are renting and have a free cancellation with a 30 day notice. Timing could work out for both sides.