The conundrum of applying for a new mortgage when still trying to sell an existing home has fuddled more than a few homebuyers. Ideally, one sells their original home, takes the investment and then puts it into a new, better home, especially to avoid capital gains taxes.
However, with the way the market is going sometimes, speed and urgency might get ahead of the ability to sell an old home timely. That’s when a homebuyer, if manageable, may need to start the financing for the new property before the old one is completed. It can also happen when a new home may get away, and the old property is still in escrow. Fortunately, there are ways around this problem, but don’t rely on banks to be very helpful.
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What to Expect, Realistically?
If a borrower were to simply follow basic lender formulas, then he or she is going to find that unless there is a sizable amount of income involved, the numbers are not going to work very well. That’s because an existing home is not a liquid asset, so it doesn’t count in determining what a borrower can afford and reasonably pay with a new loan. Yet, the reality is, the borrower is going to use the home proceeds from the sale to help pay for a sizable amount of the new home. So, the new loan is in a bit of a cash flow pinch. A generic, typical loan formula approach doesn’t work here.
Help From a Mortgage Broker
What a homebuyer needs in a transfer from one property to another is help from a mortgage broker (click here for more information: https://robsmortgageloans.com/ ). Given the wider range of options and lender access a broker has, a mortgage option for a transition approach can be far more feasible than trying to do the same with a traditional bank. Unlike a bank, which only has one route through a given underwriter and hardly ever deviates from the same program, a broker can consolidate options from dozens of lenders, including those that are willing to deal with non-traditional applicants as well. Given the irregularity of a transitional homebuyer, the unique timing of cash flow need and transfer easily puts the same kind of homebuyer in the area where a broker can do a lot of good.
Stop Struggling With Traditional Mortgage Headaches
So, instead of being frustrated again and again by bank loan officers who have very little flexibility, homeowners looking to get into a second home with one in escrow or being sold are better off with a mortgage broker, case after case. Save time and energy with this route versus losing weeks and even money on fees working with unflexible banks.