The two ways I have heard about (one of which I have used) are: get a home equity loan on your present house, then put it on the market; use the proceeds from the HE loan to buy the second, etc. You might need a mortgage on the second if you don't have any other source of funds. I have read here you must get the HE loan before you list your property as you can't get one after that. I don't know if this is true.

The other way (and the one I have used) is to get a bridge loan to enable you to purchase the second house. This, obviously is done when everybody knows you are going to sell the first house and buy the second.

But, and this is important to consider, when applying for a loan (of any kind) you need to make sure that you can carry it and any others simultaneously. The lenders will look at what your total active debt load is relative to your income, too. Where people get into trouble is taking on more credit than they can handle and then not selling the first house for a long time while possibly having three debts (original mortgage, HE and new mortgage). It can sink the whole enterprise and result in losing everything.

Having a two mortgages and a bridge loan is very stressful for worriers like me. We did it, (had no choice if we wanted to buy that particular property), and we survived but it felt like we were really in bind, or might soon be.

HTH,

Molly~

The way we did it (and I'm not recommending it) is we had a chunk of change as a down payment on the house we wanted to buy. So we bought that with a equity loan taken on THAT equity. No equity loan on the house we were selling although we could have done that as well.

Everything worked out for us. Our house sold for the price we targeted within a reasonable time period (3 double payments).

In the end, it's still two mortgages and another loan. It's very stressful. I definitely would not do this in a buyer's market. Molly is right - in the end, you really need to make sure you can carry all that debt INDEFINITELY. If you can then do it but if you are thinking something like "well, we can do it for 6 months...", don't do it.

Hubby & I were in the car yesterday listening to talk radio when something came on saying banks were not going to be giving many home equity loans right now, and/or that they would be a smaller percent. Once Dave comes on he can probably elaborate on what I heard.

At another place I go to, someone is interested in a house that "the sellers need this much from the sale & are bringing money to the table" which I read to mean that they got a HELOC so that they could put a deposit on a house they found. The market crashed harder and now they have dug themselves pretty deep.

However, the housing market here is pretty strong, still, or at least much better than most parts of the country right now. Our house is a very affordable starter home and I'm thinking that because it is in a lower price range, maybe there will be more buyers who can afford it.

Be careful. I don't know of many markets that are selling. People have posted here saying pretty much the same thing as you and can't sell their house either. If you are thinking of selling, you should start getting agents in to interview (I have a list of questions) making sure you ask what the days on the market is and if there is a popular price range buyers are buying from.

Here are a few articles I found

Wachovia cutting home-equity credit lines

Banks cut back on home-equity credit lines

Banks put stopper in home equity spigot

Homeowners left in the lurch

Chase Hid Key Reason It Cut Homeowner's Credit Line
When Klein took out his credit line he was told he could borrow as much as 80 percent of the equity in his home. Klein maintains that the formula has been reduced to 65 percent.

"The letter we sent your reader and other customers was very clear," Kelly wrote me. He noted that the letter said:

" ... the valuation [of your home] no longer supports the full amount of your Line of Credit, so the credit line on your account will be reduced to" $155,000.

Here are some thoughts, not sure how realistic......

I think you (1) Need to get an agent in there and ask them what your house will sell for - not the price you would hope to get if you waited for the right buyer in a strong market but the price they know it will sell for fast. (2) Investigate the different ways with a couple of banks/credit unions you might do this - AND find out how much it will cost you in fees, and estimate possible double payments
(2) Then crunch some numbers - which is better, taking less on the house selling price if you can get the sellers to take a contingent offer or paying any addition fees (if their are any) and the estimated double payments
(3) if it costs less to sell the house fast - contact the seller and tell them - we will price aggressively, we will sell, will you take a contingency offer?
If no, well at least you have your numbers crunched on the bridge loan and double payments.

thanks so much for the info! I really appreciate it. The bridge loan I'm thinking about would be about $20K. As much as I try to figure out the points/interest thing, I can't. my mind just cant do math very well. If I take out a $20K bridge loan, is that over the top? Our present mortgage is $485. The new mortgage will be about $700. Only the bridge loan amount worries me. We live pretty well under our means, so we can carry two mortgages for a little while without getting too stressed, but again, i'm not sure about that bridge loan payment. I know I should call a bank/credit union and ask these questions, but I like talking to you guys. Maybe I'll make some calls today. again, thanks for all the info!And, we have an appointment with a realtor tomorrow morning.

"The bridge loan I'm thinking about would be about $20K"

Most banks are going to laugh at a bridge loan that small.

How much equity is in the present house?
Market value - mortgage balance?

Getting a small portion of that will remain easy.

"The bridge loan I'm thinking about would be about $20K"

Most banks are going to laugh at a bridge loan that small.

Maybe they can put it on a credit card? ;)

We don't have credit cards. this is the situation. we have a house now that has a balence of $47K. The house comps have it going for $75K. Of course, I know you can not count on getting what you think you will get, especially when you need it. The house we are looking has an asking price of $89K. My realtor hasn't done a whole lot of research yet, but she said that is a bit high for the area. I was looking at the real estate data for my city today (san antonio) and although sales are a little bit down, houses are still appreciating. Days on the market are still a little longer, but not drastically. Price per square foot has gone up, not much, but its gone up.
so, we don't have much in savings, so we would need the equity from our present house to put down on the new house. I'm obviously not working with high numbers here. the average house here is $147K. Still way affordable compared to a whole lot of cities. What I'm trying to do here is get an idea, just knock it around, about what my options are and what anyone thinks of the situation. I value the advice I receive here and I really enjoy reading everyone's posts!

I would say that after what I posted, my 1st stop would be to see how much equity you can actually pull out of the house.

"We don't have credit cards. "

Hope you lender is friendly.

Credit cards and paid off things like auto loans are how you establish credit.

Lenders like to see that you have borrowed money, paid it back on time, and know how to manage finances.

"We don't have credit cards. "

Hope you lender is friendly.

Credit cards and paid off things like auto loans are how you establish credit.

Lenders like to see that you have borrowed money, paid it back on time, and know how to manage finances.

Well, they do have the current mortgage... If the OP has been diligent in paying the current mortgage, not having a credit card shouldn't be a problem.

Ok, well, thanks for all the help. We talked to our realtor this morning and the next step is to talk to someone about financing. I should talk to a couple of different people about that, right? not just talk to one and let it go at that?

thank you