Are you living in Collingwood and caught in between selling and buying a home? Christine Smith has tips on what to do!
Trying to sell a home and buy one at the same time can be a challenging task. Many Collingwood home buyers find themselves caught in a difficult position as they often cannot place an offer on a desired home and simultaneously sell their current one.
Consider the following tips from Christine Smith on how to close the gap between buying and selling your homes in Collingwood:
Evaluate whether to buy or sell first. In a sellers market like Collingwood Real Estate, locating the new home and starting the buying process may be the best approach. It is important to note most people need to sell their current home to qualify for a loan to purchase the next one, which is often more expensive. In a buyers market, you should be aware of the time frame and the possibility of not being able to sell your current home quickly.
Buy on contingency. Have a prior-sale contingency included in the purchase contract of the new home. It provides the opportunity to withdraw from an offer if the current home does not sell by a specific and agreed upon date.
Bridge Loans. A bridge loan means borrowing from the current homes equity until the proceeds from its sale are obtained. Some bridge loans require that only the interest be repaid; others mandate a single payment of interest and principal when the loan needs to be paid back. If protracted, bridge loans can be expensive, so it is best to use them for overlaps of a short period of time between closings.
Review home equity options. For those who need to borrow for a longer period than just a few months, it is best to use a home equity loan or a fixed-rate line of credit, particularly if sizable equity has been built up.