Buying new home while trying to sell existing one?
Due to job/family relocation, if someone buys a new home and puts the existing one in the market, if they can not afford paying both mortgage at the same time and renting is not an option, can they simply ignore the existing home's payments (for not more than 90 days) to hopefully sell it and just simply pay it off upon sale?
Although it is not ideal, but is it a feasible practice?
Thanks everyone for the answers. My thoughts will be
1. Keep the mortgage current and rent while I buy/move to the new house
2. Or Consider selling before purchase
My second question becomes, will there be a lending problem is I"m current and renting out the home to get a second/new primary residence?
- FLv 61 month ago
You don’t say where you are, but in the UK, if you buy without selling your first property, the second is considered to be a “buy to let”, and you’ll pay another 3% stamp duty. That’s about £10k in an ave house.
- Obi Wan KnievelLv 71 month ago
If your house doesn't sell within 90 days, you're asking too much.
- Christin KLv 71 month ago
Not paying your mortgage--either one of them--is the surest way to lower your credit rating, and destroy your financial balance. Will there be a lending problem? Of course there will.
You sell your present home first and you ask for an extended closing date. That gives you more time to buy a new house.
Long closings are there for a reason. This is the reason. So a new residence can be purchased and moved to. Talk to your realtor about this.
- SCATTY cLv 61 month ago
It wouldn't happen.
You put house no. 1 on the market. You are paying a mortgage on it.
You look for a new property, and put an offer on it. You will be asked how you intend to finance that house, is cash or mortgage. You reply mortgage. During your mortgage application it will soon become clear that you already have a mortgage on house no.1.
Now there is nothing to stop you having more then one mortgage. But you will either need a huge salary, or you will be borrowing a small amount, with an existing small mortgage. Either way, you will be able to afford both payments.
If you cannot wait to sell house 1, then you can get a bridging loan. Although this is not ideal and it is and expensive option. Far better to rent short term in your new location.
Ignoring mortgage payments isn't a good idea either, as it will leave your with bad credit for some years to come.
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- 1 month ago
Yes. It’s done all the time. But I wouldn’t risk 3 months in the hole. 2 months and u should be fine. But check with the bank first to see what the foreclosure rules are. Any thing more than 60 days and you risk pissing off the bank and the house going into the foreclosure process. If that happens, you will not be able to sale it on a standard sale without first getting it out of the foreclosure process, which will cost you almost all of the back mortgage due and fees.
If you sale it while it’s 2 months late, the payoff will just cover the bill anyway. So besides the hit to your credit for the missed mortgage payment, it’s a win for you. So keep the cash in your pocket and just pay the new house. Since you are Going to sale the other house, it makes no sense to struggle on both.
Just make sure the State property taxes are paid for the year, or you don’t risk losing it to tax foreclosure.
- TavyLv 71 month ago
No lender is going to give you a mortgage while you have an existing one.
You need to sell the other house, pay it off and start again.
- EvaLv 71 month ago
Not a good idea. You'll have 3 late payments (at least) on your credit . There's also no guarantee that the house will sell within 3 months. You risk having a foreclosure on your record.
- Anonymous1 month ago
No that isn't an option, especially when a mortgage loan is needed to buy the next house. No lender is going to want to give a loan to someone who has late payments.
Instead what most people do is make an offer on a new house contingent upon the sale of their original home. If the seller of the new home finds the offer acceptable the most common scenario is that buyer and seller agree to a first right of recession which allows the seller to continue to market the property and if they find a willing buyer they return to the the original buyer to release their contingency to sell their house and move forward, or void their sales contract, allowing the seller to sell to the other buyer.
Update: Your plan to keep the first house is fine, but getting the mortgage on the second house may be troublesome because you can't count your rental income on your original house until you have collected (and reported it on your taxes) for two years. And without it, it may make it difficult for you to attain the loan amount necessary to buy the next house (in relation to your debt ratios). You will also be looking at a slightly higher interest rate on the new house because it is a second home it will be identified by the lender as an investment property regardless of your plans to make it your primary residence. Good Luck.
- realtor.sailorLv 71 month ago
The first question is can you qualify for the new home with the existing mortgage? When buying the new home would you have to make it subject to the sale of the existing home? Many sellers will not accept a contract with that contingency. Put the home on the market and when you have a contract with all contingencies satisfied then start looking for a new home.
- Elaine MLv 71 month ago
Getting into trouble with unpaid mortgage with the bank will not help you. That's not how you do this.