We’re selling our home and buying a new one — but it looks like we might have to close on the purchase first. Help!!
In a slow market, when you buy, you put a sales contingency into your offer — you basically predicate your purchase on your the sale of your last home.
In a faster market, however, you won’t be able to do that — the seller of your new home won’t accept the risk.
Sometimes mortgage brokers would offer bridge loans, but in the current mortgage climate, they’re tough to swing.
So what you need to do is sit down with your mortgage broker or bank and tap the equity in your first home, either by using a Home Equity Loan or a Home Equity Line of Credit.
That will give you the cash you need to purchase the new home, and the loan or HELOC will get paid off with the proceeds of the old home.
The paperwork on these is pretty easy, but because of the potential for fraud that comes with tapping your home equity, I think it’s worth it to pay an attorney to review these papers.