You may have found your perfect home, but if your current one hasn’t sold yet in California, it can be daunting. However, there are various solutions and strategies you can use to tackle this dilemma. In this article, we will share some practical tips to help you move forward and still make your dream move a reality.
Navigating the process of buying and selling a home simultaneously can be challenging. Regulations from organizations such as FHA, Fanny Mae, and Freddie Mac can create hurdles for individuals seeking a second mortgage while still owning their current home. Clearing these obstacles can require careful planning and consideration. Seeking guidance from professionals in the real estate industry can help ensure a smoother transition and successful management of finances throughout the buying and selling process.
How to Move if Your House Hasn’t Sold Yet in California
First off, to qualify for a second mortgage through the FHA, you must meet certain qualifications.
If you are looking to secure a second mortgage while still owning your current home, you will need to have a valid reason for needing to move immediately, such as a job relocation or family emergency. Other reasons may include needing a larger living space or separating from a spouse.
In addition to having a good reason, you cannot owe more than 75% of the value of your first home. It is essential to research and fully understand all the regulations and restrictions before assuming you will qualify for an additional loan through the FHA or other organizations. Seeking guidance from real estate professionals can also be helpful in navigating this complex process.
Asking family can be another route, so long as you put everything in writing.
It’s important to establish clear terms and an agreement to pay back borrowed money from family members in full, especially when using it to secure financing for a move.
However, if there is a risk of damaging a family relationship due to money, it may be necessary to explore alternative financing options. It’s always best to approach such situations with transparency and open communication to ensure everyone’s needs and expectations are understood.
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.
Bridge loans combine two mortgage payments into one interest-only payment, making it easier to manage finances when buying a new home while still owning a current one. They usually have a short-term duration of six months to one year.
However, eligibility for a bridge loan depends on the lender’s requirements, but usually, borrowers should have a good credit score and should not finance more than 80% of the combined value of both properties.
While it may not be your first choice, you can talk to your boss or plan administrator about borrowing from your 401k.
If you’re in a bind, borrowing from your 401k might be an option to consider. Discuss the details with your employer or plan administrator and be sure to understand the tax implications. Repay the borrowed amount once your original home sells. Keep in mind that this solution may not be suitable for everyone, so do your research before making a decision.
Try to offer the seller of the second home, the option to rent it back from you for a few months.
Depending on their circumstances, the current homeowners might find it appealing to remain in their home while they search for a new one. This can be a helpful solution if you are managing two mortgages simultaneously and looking to reduce your expenses.
Add in a contingency in your offer allowing you to close on the new home, only after your home has sold.
If you put your home on the market at a competitive price, it should sell quickly. Use this as leverage when making an offer on a new home. Assure the sellers of the second home that the closing process will not be delayed, and that you are committed to closing within a specified timeframe. This can increase the likelihood of your offer being accepted.