When you’re not a first-time home buyer – whether it’s your second purchase or tenth, you’ll most likely have unique opportunities and challenges. Although you have more experience buying a home for the second time than someone purchasing their first, you also have a home to sell and one to buy. That means double the “to-do list,” but it also means getting through escrow and closing on time has a whole new urgency. Read on to discover our top tips to get you through this successfully.
Process of Selling a Home and Buying a New One
Your first home purchase was easier – but probably scarier! Since you didn’t have a property to sell, all you needed to do was move. But, since you now own a home, you must:
- Get it ready to sell
- Keep it immaculate for showings
- Go through the selling and negotiating process
- Get through closing
AND – you need to find a new home. A good analogy to this process is having twins after having one child. If you thought you were busy with one – add two more, bringing it to a whole new level.
BUT – the way to handle this extra added stress is to have an experienced lender like Homestead Financial Mortgage who works with this type of scenario every day.
2nd Time Home Buyer with Simultaneous Close
Selling your home and buying one at the same time is called a simultaneous close. It’s like running two relay races at once. Since you’re selling your home, you want to make sure whoever is purchasing it is qualified. And most importantly – it will close on time. Otherwise, the purchase of your new home will be held up.
And as the buyer, besides getting your home sale closed on time – your financing must be rock solid.
With Homestead Financial, we have the solution. It’s called FAST track because we can close a loan in 14 days. It makes buying a home for the second time fast and easy. All you need to do is provide:
- Proof of income: last 30 days of pay stubs, W2s, and the last two years of tax returns.
- Proof of funds: at least 60-days of bank statements, 401k/IRA statements, or other statements showing the source of funds.
2nd Time Home Buyer with Recast
If you’re trying to buy during a hot seller’s market – it’s challenging! You’ve probably had some sleepless nights wondering what happens if your home sells before you find another one. Will you end up living in your car or racking up a bill at a hotel?
The answer is a mortgage recast. Here’s how it works:
- Instead of selling your home and paying off your mortgage. You get preapproved to handle two mortgage payments – your current one and your new one.
- Next, you purchase your new home.
- Then you move in and get settled.
- Now it’s time to sell your old home.
- Once it sells and closes, the old mortgage will be paid off.
- Then you pay down your new mortgage with the proceeds.
- Ask your servicer to “recast” your new mortgage to show the lower balance.
- Now your payment will be less because you paid the balance down.
Sale & Lease Back
The other option is to plan the end before you sell your home. In your contract, ask to lease back your home for a specific period. 30 to 60 days is a typical timeframe for a leaseback. And – don’t budge. You’ll find a buyer who’s willing to do that.
Being able to stay in your home a little longer gives you the breathing room to find your next home, close, and move without feeling like your hair is on fire.
When you’re buying your second home, there will be challenges. To get through the process successfully and close on time, you need an experienced lender who knows all the pitfalls and how to avoid them.
Homestead Financial Mortgage is a top mortgage lender for homebuyers who are also selling. We know how to make the simultaneous close stress-free. Our low-interest home loans are some of the best in the states we serve. We service Arkansas, Colorado, Florida, Illinois, Indiana, Kansas, Missouri, Ohio, Tennessee, and Texas. Contact us today to learn more about the home loan products we offer that are right for you.