Solutions for Move-Up Buyers

Filed under: Home Buying Tips

In the past eight years, the real estate industry has been growing, and many homeowners have gained quite a bit of equity in their properties. As a result, we are seeing more move-up buyers come through. What that means is the homeowners are ready to use the equity to buy their next home.

If you are in this position, there are a few things you need to think about when preparing for this move:

Contingent Sales

One concern that you might have is selling your current home so that you have the funds available to buy the new property. Keep in mind that I’m not a real estate agent. But, I am familiar with the process of making a contingent offer. What this means is that you submit an offer on the new house, and closing on that property is contingent on selling your current home.

This option is a great solution when you are ready to buy a home. But, many people know that contingent offers aren’t quite as strong as someone who has the cash ready for a purchase.

Is There a Way to Get Around a Contingent Offer?

There are options to consider if you don’t want to use a contingent offer. The biggest question is where the money will come from. Is it possible to pay for the new home if you are planning to use the equity from your current home to buy the new property?

The first option you might consider is setting up a home equity line of credit against your house, then use those funds to buy the new house. Another possibility is to temporarily use funds from other accounts, such as retirement accounts, life insurance policies, or other assets. Just make sure that you are working with a finance professional to be careful with tax implications of this strategy. Often, you can avoid penalties by borrowing the money for 60 days and then putting it back during that time.

Don’t overlook the option to talk to family for assistance. If you know someone who is in position to help, then they might be willing to offer a temporary loan to help with the offer on your new home. Family members are often happy to help out, especially if they can see the exit strategy.

If you are thinking about a move-up purchase, then you are welcome to talk to me about the possibilities. Each situation is unique, and I can help you find the mortgage solutions that will work for your circumstances. Feel free to call anytime if you have questions about financing for your home. Share, like, and comment to let me know what you think!

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