Caught between buying and selling?

Caught Between Buying and Selling?

Sometimes selling a home and buying a new one can be a difficult balancing act as a homebuyer tries to place an offer on a new home and sell their current home simultaneously.


These homebuyers and sellers get "caught in between." Below are a couple of suggestions on how to close that time gap between buying and selling a home.

Consider a bridging loan. A bridging loan means borrowing from the current home"s equity until the proceeds from its sale are obtained. Some bridge loans require that only the interest be repaid; others mandate a single payment of interest and principal when the loan needs to be paid back. If protracted, bridge loans can be expensive, so it is best to use them for overlaps of a short period of time between closings.

Review home equity options. For those who need to borrow for a longer period than just a few months, it is best to use a home equity loan or a fixed-rate line of credit, particularly if sizable equity has been built up

Buy on contingency. Have a “subject to sale” clause included in the purchase contract for your new home. It provides the opportunity to withdraw from an offer if the current home does not sell by a certain date.

Talk to your real estate agent, they can advise you on the best approach to suit your situation.