Jennifer Hershey has more than twenty years of experience in the Mortgage Industry as a loan officer. She is the owner of http://www.explainingmortgages.com/, a mortgage resource site devoted to making mortgage terms and products easy to understand.
For those of you who are currently a home owner, and are interested in purchasing a new home, you may be asking yourself the question “should we sell our current house before we buy another one?”
My answer to this question would be yes. Before you buy a new house, it would be wise to sell your current home first. An ideal circumstance would be to make the settlement for both houses on the same day, or at least within the same week.
The problem with purchasing a new home before you sell your current one is that you will be carrying two mortgages. If your current house is not going to settlement for one month after the purchase of your new home, perhaps you will survive. What you do not want to end up doing is carrying that mortgage for more than a month.
Now lets suppose your old house is going to settlement within a month after the purchase of your new home. That is fine, but what if the potential customer sends a home inspector through your house and they find a major problem or two. Another possibility is a pest inspector might come across termites or termite damage.
Both of the above scenarios are very realistic, and could wreak havoc on your financial situation. Number one, getting things fixed to satisfy the potential buyer takes time and money. Number two, the longer the job takes, the longer you have to carry that mortgage.
So weigh your options carefully. If at all possible, have your current home sold before purchasing a new one. Or have it arranged that you won’t be into your new home until the settlement is complete on your old home. This way you will only be paying a mortgage on one property and not have the financial burden of having to pay a second mortgage.
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