Can I combine the mortgage of my current home and buy a newer home?

Asked by Shirley, 24501 Fri Nov 26, 2010

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Nick Pakulla, Mortgage Broker Or Lender, Rockville, MD
Sun Nov 28, 2010
Depending on your circumstances, there is likely a way to deal with your scenario. As others have pointed out there are options (HELOC, refi, bridge loan, sell first, etc), my bank is one of the few banks that will allow you do an 80/10/10 piggy back loan or a bridge loan. This means you can get into the new property with as little as 10% down. If you are interested I would be more than happy to go over some options over the phone.
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Joshua & Mic…, Agent, Lynchburg, VA
Sat Nov 27, 2010
When a home buyer is buying another home before selling an existing home, two common ways to find the down payment for the move-up home is through financing either a bridge loan or a home equity loan (or home equity line of credit). Generally, a home equity loan is less expensive, but bridge loans contain more benefits for some borrowers. In addition, many lenders will not lend on a home equity loan if the home is on the market.

Bridge loans are temporary loans that bridge the gap between the sales price of a new home and a home buyer's new mortgage, in the event the buyer's home has not yet sold. The bridge loan is secured to the buyer's existing home. The funds from the bridge loan are then used as a down payment on the move-up home.

Some lenders who make conforming loans exclude the bridge loan payment for qualifying purposes. This means the borrower is qualified to buy the move-up home by adding together the existing loan payment, if any, on the buyer's existing home to the new mortgage payment of the move-up home.

Some things to keep in mind are: Bridge loans cost more than home equity loans; Buyers will be qualified by the lender to own two homes and many will not meet this requirement; Making two mortgage payments, plus accruing interest on a bridge loan, could cause stress.

I would suggest contacting a mortgage consultant to discuss your options and see what you can qualify for before you begin your search and fall in love with a home. Find out what would suit your budget the best and find a person that has the heart of a teacher. You want your home to be a blessing not a burden. Please feel free to contact me for any other questions!
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Scott Godzyk, Agent, Manchester, NH
Sat Nov 27, 2010
Despite the answers, yes there used to be loan programs just like this, they are called blanket mortgages or umbrella loans. You may have a hard time finding one these days with all the new regulations and clamp down in lending. The keys will be how much the houses are wortyh and how much you currently owe. You find these loans more as investment loans or private mortgages, some local banks offer them as portfolio loans. You are going to need at least 30% equity if not more depending on your credit, your best bet is to contact a mortgage broker who has access tomore types of loans or local banks and credit unions that may have these programs.

Please see my blog for more info on getting a mortgage in todays market
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Vicky Chrisn…, Agent, Purcellvile, VA
Sat Nov 27, 2010
Wouldn't that be nice? Sorry, but no.
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Cindy Jones, Agent, Alexandira, VA
Sat Nov 27, 2010
I am unaware of any loan programs that would allow you to combine mortgages on two homes into one mortgage. If your first home is paid for you may be able to take out a home equity loan and pay cash for the second property. I would consult a financial adviser and a mortgage professional to determine what would be the best course of action for your circumstances.
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Michelle Gon…, Agent, Los Alamitos, CA
Sat Nov 27, 2010
Hi Shirley,
If your question is about combining two homes with one loan, the answer is no. If your current home has equity you may be able to either refinance or get a home equity line of credit to pull cash out and purchase a second home.
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