| ="body"> | | | | have a "sale of home" requirement, you could |
| Buyers who are "moving up" or "downsizing" | | | | choose to remove the contingency. |
| often have a dilemma. They can't decide whether | | | | If you had a non contingent contract to purchase, |
| to put their home on the market first, or contract | | | | you'd want to quickly put your old home on the |
| to buy their new home first. | | | | market and get it sold so you wouldn't face the |
| If they put their home on the market, it might sell | | | | prospect of two mortgages to meet. Still, if part |
| and then they might find it impossible to find what | | | | of what you'd borrowed could cover down |
| they want. Alternatively, if they find a home | | | | payment and closing costs, and part could be set |
| they'd love to buy, they realize they could lose | | | | aside to meet the old mortgage payments for a |
| out because their old home won't sell quickly | | | | few months, it could work with no financial strain. |
| enough or the sellers won't wait. What is the best | | | | Borrowing out home equity at the beginning of |
| approach? | | | | the process doesn't lock you into anything. It just |
| Alternatives | | | | gives you more options. |
| We've noted so many times that there is seldom | | | | A Bridge Loan |
| a "right" answer. This is another such instance. | | | | Let's explore another possible scenario. Let's say |
| Looking at some of the alternatives and how | | | | you decide to put your home on the market and |
| they could work for you might make it easier to | | | | get a contract on it before looking for your new |
| figure out how to approach getting from where | | | | home. You (or your Realtor) begin to market it. |
| you are to where you want to be. | | | | Your home is getting lots of showings and you're |
| Home of Choice Clause | | | | sure you'll get a contract soon. |
| Let's say you decide to put your home on the | | | | You decide you'll do some preliminary shopping for |
| market first because you want to be sure of the | | | | your new home "just to see what's out there." |
| amount of money you'll have to work with. You | | | | You find the "perfect" home and "fall in love" with |
| (or your Realtor if you have one) can market it | | | | it before you get a contract. The seller will not |
| with the provision that settlement is contingent on | | | | accept a contingent contract. Is there any way |
| your finding the home of your choice. | | | | you can avoid losing out on the purchase of this |
| Thirty days is typical for a "home of choice" | | | | home? |
| clause, but I've seen periods of time at lengths as | | | | It isn't cheap, but if you have very good credit |
| long as sixty, ninety, or even one hundred twenty | | | | and a lot of equity in your home, you can |
| days. Wording often runs something like, | | | | probably get a bridge loan to buy the home you |
| "Settlement hereunder shall be contingent for up | | | | fell in love with. Generally bridge loans have a high |
| to sixty days on Seller's finding and contracting to | | | | rate of interest and are for a period of six |
| buy the home of his choice." That can take the | | | | months. They can usually be renewed for a |
| pressure off and give you breathing room. | | | | second six month period. Typically you can |
| Home Equity Loan | | | | borrow up to eighty percent of the equity in your |
| You could apply for a home equity line of credit | | | | current house to come up with the down |
| (often referred to as a HELOC) before you put | | | | payment you need this way. |
| your home on the market. If you have a | | | | As always, there are many choices. We've only |
| significant amount of equity in your home, this can | | | | mentioned some of them here. You might want |
| provide you with down payment and closing costs | | | | to start by meeting with a lender to determine |
| for your new home. | | | | specifically what is possible for you. Maybe you |
| You can then shop for a new home and write a | | | | can use the ideas in this article as a starting point |
| contract contingent on the sale of your old home. | | | | for the conversation. Who knows where it will |
| If the seller will not accept the contingency, or if | | | | lead? It could be the beginning of developing the |
| you are in competition with a buyer who does not | | | | perfect strategy for you. |