Buy Before You Sell Loans

A "buy before you sell" loan is a financing solution that allows homeowners to purchase a new property before selling their existing one. This type of loan is designed to bridge the financial gap, enabling homeowners to move into their new home without the pressure of having to sell their current home first. Here’s a detailed overview of how these loans work, their key features, and considerations:

How a Buy Before You Sell Loan Works

1. Qualification: Homeowners qualify for a new mortgage based on their financial situation, including their income, credit score, and the equity in their current home.
2. Bridge Financing: The loan provides funds to purchase the new home, often incorporating a portion of the equity from the existing home.
3. Temporary Ownership of Two Homes: Homeowners own two properties simultaneously until the sale of the existing home.
4. Repayment: Once the current home is sold, the proceeds are used to pay off the bridge loan or to reduce the new mortgage balance.