So, Do I Have To Sell?
Yes……No…… Maybe….. It depends!
If you can qualify with both your current residence and the proposed payment on your new house, then the simple answer is No!
What If I Rent My Current Property?
This scenario presents the “maybe” and the “it depends” answers to the question.
If you’re not qualified to carry both mortgages, an option may be to rent the property you are leaving in order to offset that mortgage payment.
In that scenario, lenders will count 75% of the monthly rent you are proposing to receive. In addition, a lending guideline that can present a huge hurdle, is that the home you are leaving must have 30% of documented equity. (ie. you owe no more than 70% of the appraised value of that home)
Without that hefty amount of equity, you will have to qualify with BOTH mortgage payments.
What If I Can’t Qualify Based On Both Mortgage Payments?
Then this answer straightforward, you will have to sell your current home before buying a new one. Sometimes you can coordinate the selling/closing of your current home and buying of the new home to happen simultaneously. This is done by making the purchase of your new home contingent on selling your current home. This transaction can be tricky and in our current market, often times the seller of the home you want to buy, won’t accept an offer based on that contingency.
As you can see, purchasing one home while living in another can be a complicated transaction. Contact your mortgage professional to determine what your options are.
