Home Buying in Baton Rouge>Question Details

Terry Gassett, Home Buyer in Austin, TX

Can we use our current home (which is paid off) as a down payment on a new home while it is up for sale? Thank you for your time.

Asked by Terry Gassett, Austin, TX Tue Jul 9, 2013

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11
Ask your local trusted lender about a reverse mortgage, a cash out refinance, or a home equity loan. All are options for you. A local realtor can also help get you in touch with a good lender who will meet your needs - excellent realtors know everyone!!
0 votes Thank Flag Link Sun Sep 22, 2013
That's not a down payment, that's called collateral..
0 votes Thank Flag Link Sun Sep 22, 2013
Hi Terry

Talk to the many fine agents responding to your question.

The answer is yes, you can.

One can do a cash out refinance, or a home equity loan.

There are other complex instruments one can use, but the above will be the easiest.

Perry
Web Reference: http://ruthandperry.com
0 votes Thank Flag Link Tue Jul 30, 2013
You just have to find the right bank or mortgage company that will be willing to work with you. There are different options that different loan companies have. Find the one that fits your needs.
0 votes Thank Flag Link Tue Jul 30, 2013
You can receive a gift from an immediate family member, or you MAY be able to take it out of your 401K for your down payment, As long as neither require repayment ie...LOAN!
0 votes Thank Flag Link Wed Jul 10, 2013
a bridge loan is to "bridge" an existing mortgage to a new mortgage... The buyer said that her home was paid off!

OMG! You cannot borrow money for a down payment! FHA, nope, RD Nope, VA Nope, Conventional NOPE


Where do you people get your info??
0 votes Thank Flag Link Wed Jul 10, 2013
You may be able to get a bridge loan while your home is on the market. Please contract your bank and see if they have a program to fit your needs. If you are moving to Baton Rouge I would appreciate helping you with all your real estate needs. Thanks Wynona Squires
0 votes Thank Flag Link Wed Jul 10, 2013
This is a common position to be in and is done all the time. The second home is not going to be looked at by most lenders as an investment property, if, it is going to be your primary residence. Most of my clients get enough of a "Bridge Loan" on their existing house to cover 20% or more of the new homes price. By doing so, the new home loan is below 80% and you don't have to have PMI (Private Mortgage Insurance).
Be prepared to pay two mortgages for a few months, depending on how long it takes to close on the house you're selling. You can get an idea of how long your property is expected to be on the market through your Realtor.

You may also have some expenses getting the bridge, such as appraisal, and closing costs; sometimes the expenses are rolled into the loan and no cash will be do. Also look into getting the bridge with the same lender you will get the primary from. This may help simplify the process too,

If you have the ability to go this route, it will likely help make the move a lot less stressful or complicated.
0 votes Thank Flag Link Tue Jul 9, 2013
If the first house is not on the market, you can take out a home equity line of credit for the down payment on the next home. You will have to include the monthly payment (which might be interest only) in your debt to income ratios to qualify for the new mortgage.

Keep in mind that you will have to budget for continued insurance and loan payments for both properties for the length of time t takes to sell the first house.

When you are ready to close on the first home you will be required to pay off the line of credit just as you would any lien.
0 votes Thank Flag Link Tue Jul 9, 2013
Generally speaking,,, NO!

You cannot borrow ( which IS a bridge loan) the down payment for a mortgage!! Thats real estate 101


Also, since you already have a house, the 2nd home will probably be considered as an investment property if with in 100 miles or so, and you will need around 25% down for the down payment


You should contact your bank for finaning options
0 votes Thank Flag Link Tue Jul 9, 2013
Yes. It's called a 'bridge' loan or 'home equity' line of credit. You have to qualify for the loan but I have clients that do it all the time. If you don't have a REALTOR, contact me and I'll get you in touch with lenders that do these types if loans.
0 votes Thank Flag Link Tue Jul 9, 2013
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