So you’ve found your dream home. There’s just one problem: You haven’t been able to sell your house yet. So what do you do? In this article, we hope to help you figure out how to move if your house hasn’t sold yet in SC.
Moving can be tough when you are trying to buy and sell a home all at once. The FHA, Fanny Mae, and Freddie Mac all have rules about getting a second mortgage while you still own your home. If you want to secure an additional mortgage, you will have to clear a few hurdles.
How to Move if Your House Hasn’t Sold Yet in SC
First off, to qualify for a second mortgage through the FHA, you must meet certain qualifications.
You need to have a good reason for needing to move right away, and not after your current house has sold. For example, moving because your family needs a larger space, you are separating from your spouse, or for work purposes.
Also, you cannot owe more than 75% of the value of the first home. There are additional restrictions as well, do your homework before assuming you will qualify for an additional loan through the FHA. It’s essential to conduct thorough research and consult with lenders to understand their specific requirements and options for second mortgages or home equity loans. Additionally, make sure you are fully aware of the terms and conditions of the loan, including interest rates, repayment terms, and any associated fees or costs.
Asking family can be another route, so long as you put everything in writing.
Agree to pay them back in full upon the sale of your first house. Whenever you borrow money from family, you want clear terms to be set and adhered to.
If you think a family relationship could be damaged because of money, you might want to look for a different way to secure the financing you need. Remember that when involving family in financial matters, emotions and personal dynamics can come into play. Open and honest communication is key to ensuring that everyone involved understands the terms and is comfortable with the arrangement. Legal agreements can provide a level of protection and clarity for all parties, helping to preserve family relationships while meeting financial needs.
A bridge loan or as it’s sometimes called, a “wrap” loan can help “bridge the gap while you attempt to cover two house payments.
These types of loans will take both mortgage payments, and combine them into one interest-only payment. These are typically short-term loans, lasting 6 months to one year.
Lenders have different requirements, but you must typically have great credit and be financing less than 80% of the value of both houses. It’s important to carefully consider the costs and risks associated with bridge loans before pursuing this option. If your existing home doesn’t sell within the expected timeframe, you could end up with two mortgage payments, which can strain your finances. It’s important to carefully consider the costs and risks associated with bridge loans before pursuing this option. If your existing home doesn’t sell within the expected timeframe, you could end up with two mortgage payments, which can strain your finances.
While it may not be your first choice, you can talk to your boss or plan administrator about borrowing from your 401k.
Make sure you understand how the tax penalties will work, and pay yourself back after the sale of the original home. This may not be an option for everyone, but definitely, something to look into. Borrowing from your 401(k) can be a viable solution in certain emergency situations, but it’s essential to fully understand the terms, consequences, and potential impact on your retirement savings. It’s typically recommended as a last resort after exploring other options.
Try to offer the seller of the second home, the option to rent it back from you for a few months.
Depending on their situation, they might love the idea of being able to stay in their home while they shop for a new one. If you are attempting to carry two mortgages, this is a great way to alleviate the cost. A rent-back arrangement can be a win-win solution, but it’s essential to formalize the agreement in writing to protect both parties’ interests. Working with professionals such as real estate agents and attorneys is advisable to navigate this process smoothly and ensure that the terms are clear and legally binding.
Add in a contingency in your offer allowing you to close on the new home, only after your home has sold.
If your home is new to the market and priced well, it should sell right away. Present this to the owners of the second home, along with your offer. Ensure them that the closing won’t be delayed and that you agree to close in a certain amount of time. Including a home sale contingency in your offer can provide you with peace of mind during the buying process, but it’s important to work with your real estate agent and the seller to come to mutually agreeable terms. Keep in mind that some sellers may be hesitant to accept offers with home sale contingencies, especially in competitive real estate markets. Your ability to negotiate and the current state of the real estate market will influence the acceptance of this contingency.