Can I Buy a New House Before Selling Mine? What It Takes

Three things, in plain words:

1. Whether you can afford both payments. The lender compares what you earn with what you owe each month. If you still have the loan on your current home, that payment counts. This comparison is called debt-to-income.
2. Where the down payment comes from. If the down payment on the new home depends on money from your sale, and you haven't sold yet, that money doesn't exist yet as far as the loan is concerned.
3. Whether you have reserves. Lenders often want to see that, after you buy, you still have a cushion in case something takes longer than planned.

How much you need for each of those depends on the type of loan and your situation. I don't guess at that, and neither should you on the back of a napkin. Your lender confirms it with your real documents.

These are the most common ways. Each has its own requirements, costs and risks, and not all of them work for every family:

• Your savings. The simplest, if you have them.
• A bridge loan. A short-term loan that uses the value of your current home to give you the down payment while you sell. When the sale closes, you pay it off.
• A home equity line of credit. It's opened using the equity you've already built in your home, often called a HELOC. It's usually opened before the home goes on the market, because it's hard to do afterward.
• Other options some lenders offer for families buying before they sell. These vary a lot from one lender to the next.

If you want to understand where that money comes from, here's why the down payment for your next house is in your current house.

That's okay. It isn't a "no" to the new home. It's a "no" to that order. You still have options:

• Make your offer contingent on selling your home. You offer on the new home with the condition that yours sells within a set time. Texas has a form for this. Not every seller accepts it; here's when a seller can turn down your offer if you haven't sold.
• Sell first with time to move. We negotiate a closing date with some room, or a short stay in your home after the sale.
• Coordinate both closings. Sell and buy on nearly the same day, with the money from one moving to the other.

1. Talk to a lender before anyone else. Before touring homes and before the sign goes up. Here's why you talk to the lender before the sign goes up.
2. Gather your paperwork. Your lender will ask for proof of income, account statements, and the details of the loan you already have. Having them ready saves weeks.
3. Work out the real number from your sale. Not the sale price, but what you keep after paying what you owe and the costs of selling. I do this with you, using recent sales in your area.
4. Get your home ready to sell before you move out. If you buy first, your old home will sit empty. Decide now which repairs make sense and which don't.
5. Have a plan in case the sale takes a while. How many months can you carry both homes without squeezing your family? That answer has to exist before you sign on the purchase.

• Signing on the new home thinking "mine will sell fast." It might. But the plan has to hold up if it doesn't.
• Opening new credit in the middle of the process. A new car or furniture on credit can change what your lender sees. Ask before you open anything.
• Using your reserves for the down payment. You lose your cushion right when you need it most.
• Leaving the sale of your home for "later." Later comes fast, and with two payments it comes faster.

Does buying first cost more?

It can. Carrying two homes costs money, and some ways of covering the down payment have their own costs. Your lender shows you those costs before you decide.

Does my current home count as money toward the new loan?

Its value can help, but only in certain ways, like a bridge loan or a line of credit. Your lender tells you which one applies.

Can I get approved for the new home without selling mine?

Some families qualify and some don't. I can't promise an approval; no honest person can. What I do is prepare you for that conversation and connect you with the right lender for your situation.

How far ahead should I start?

The sooner you talk to a lender, the more options you have. A line of credit, for example, gets opened before your home is listed.

Buying before you sell isn't for everyone, and there's nothing wrong if it isn't for you. What matters is knowing before you fall for a house, not after. With the numbers clear, you choose the order that lets you sleep at night.

Want to know whether buying first is an option for your family?

You can start with the sell-and-buy questions. Or call or text me at 469-441-8890, or email veronica@veronicayeary.com. I'll help you prepare for the conversation with your lender and see which option fits, with no commitment and nothing to sign.

I'm Veronica Yeary, a real estate agent in Dallas-Fort Worth, CRS®, ABR®, SRS® and CIPS, in real estate since 2010. I sell your home and find the next one with a single plan, with me from start to finish.

469-441-8890 · Text or call · veronica@veronicayeary.com · Email