How to Buy a New Home While Selling Your Old One | Morgan Stanley (2024)

FAQs

How do I sell my house and buy another at the same time? ›

If you need to sell your home in order to buy another home, the fastest way is with a concurrent closing. Concurrent closing does not mean simultaneous closing. The sale and the purchase can't happen at exactly the same time. A concurrent closing usually happens within two days.

You won't be responsible for paying two mortgages at once when you sell your home before buying a new one. Selling first may help you feel less rushed about deciding on your new home, especially if you've locked in where you're going to stay after the closing date.

You can use home equity to buy another house if you have enough of an ownership stake in your residence and meet other eligibility requirements. The most common ways to tap your equity are via a home equity loan or home equity line of credit (HELOC).

To buy another house without selling your first, explore options such as obtaining a HELOC or line of credit on your existing property. These approaches leverage the equity in your current home to fund the purchase of a second property.

While you'll still be obligated to pay capital gains after reinvesting proceeds from a sale, you can defer them. Reinvesting in a similar real estate investment property defers your earnings as well as your tax liabilities.

When you sell your home, the buyer's funds pay your mortgage lender and cover transaction costs. The remaining amount becomes your profit. That money can be used for anything, but many buyers use it as a down payment for their new home. Here's how the money is divvied up.

Buying another house as an owner of an existing property can be relatively easy, depending on various circ*mstances. One needs to consider their current financial situation, credit score, debt-to-income ratio and cash reserves when deciding if a second home purchase is feasible.

Porting a mortgage essentially means transferring your mortgage to a new house. This will include the current terms of your loan, such as the interest rate and payment schedule. But you can't simply take your loan and plop it onto your new home.

Best Time to Sell Your House for a Higher Price

April, June, and July are the best months to sell your house in California. The median sale price of houses in June 2023, was $796,400, which is expected to grow more in 2024. However, cities like Arcadia and San Mateo follow an upward trend throughout the year.

There are often stricter requirements and higher interest rates for second home mortgages compared to those for a primary residence. It is also possible that a secondary residence mortgage will require additional qualifications, including a down payment, cash reserves and good credit.

How long should you live in your first house before selling? ›

Before selling your home, there is a set amount of time you should stay in it to make a profit or break even on purchase costs. This amount of time varies by person and circ*mstance, but wisdom from the real estate world says an average minimum target is about five years.

If you're buying a second home, you'll generally need at least a 15-20% deposit. But the higher the deposit you put down, the more likely you are to access better deals. For a buy-to-let mortgage, you're likely to need at least 25% of the property value. Some lenders may ask for as much as 40%.

If you have a significant amount of equity in your primary residence, you can tap into it through a home equity loan. You can then use that money for any purpose you wish, including buying a second home or an investment property.

If you still owe a large amount on your current mortgage or have other substantial debts, a second mortgage may put your debt-to-income ratio above the maximum the lender allows. You may be required to make a larger down payment for a second home, and a second mortgage will probably have a higher interest rate.

Simultaneous closing, also known as a same-day closing or back-to-back closing, is a method where a buyer purchases a property and immediately sells it to another buyer, all in a single transaction.

Here's how each month of the year ranked for the best time to sell a house. The highest-earning months are, in ranking order, May, June, April and March. Just over 18 million purchase transactions took place during this period, according to ATTOM.

If the home is a rental or investment property, use a 1031 exchange to roll the proceeds from the sale of that property into a like investment within 180 days.13.