Should You Sell Your House Before You Buy a New One?

Buying a new house can be exciting. This is particularly true if you’re moving to a new area. However, one of the biggest concerns about it is the budget. One option you can consider is to sell your house before you purchase a new one. However, is it viable? 

It might appear like the most logical approach of making money to buy a new house. Though it might be a viable option, there are pros and cons to both selling your house first and buying a new one.  

So, what should you do? The answer greatly depends on your situation. Before you search for homes for sale in Fayette County TN, here are several things you should know about selling and buying a house: 

Buying a New House Before Selling Your Old One 

Purchasing a new property before you sell your old one does have its fair share of drawbacks. This includes a second mortgage. Aside from that, the seller might require a down payment. However, there are a lot of available loans that can help cover the down payment. This is particularly useful if you’re qualified for that loan.  

Though purchasing a house before selling does have a higher debt-to-income ratio due to the down payment and second mortgage, it does have a benefit.  

It can make moving a lot easier. Knowing that you’ve got a place to go after you sell your house is extremely advantageous. This is particularly true if you’ve got a lot of furniture pieces, pets, or kids.  

Selling Your Old House Before Buying a New One 

Selling your old house first is a rational approach. However, you might have to consider the additional cost of renting a temporary home.  

If we live in a perfect world, you would list your house on the market while looking for a new one hoping that your house sells right away. With this, you can use the money you obtained from selling your house to buy a new one.  

Unfortunately, we aren’t living in a perfect world. On almost every occasion, the closing dates do not align. You may have to look for a temporary place to stay before you can purchase a new house.  

Remember that if you’re waiting for the sale of your house to use the money for a new one, there are a couple of loans you can consider. One of them is a bridge loan. It’s a short-term loan that you can use if you don’t have the budget to buy a house.  

A lot of sellers might try to avoid committing to a rental. That is why they may have to settle for a new house that isn’t suitable for them. You should not purchase a house if you’re not happy with it. It is ideal to spend money on a rental property so that you can find a house that you can be satisfied with.  

While you list your home on the market, it’s a wise move to plan for additional costs and delays.