We found our next house before selling the current one too. The new mortgage could be "re-cast" so check that out. It means we could add more to the down and then re-calculate the payments without changing any of the other terms. There was a time-frame for that option, 60 or 90 days. There was a fee but it was minimal.

Is this something that's done regularly - Mortgage for, say, $350,000, down payment of $20,000, sell old house for $310,000, put that all towards mortgage at one time, leaving a balance on mortgage of about $20,000, & paying that off in about 2 yrs.? Any negatives to this?

You should talk to a mortgage broker. I would think you are better off tapping the equity in your existing house rather than getting a big mortgage with PMI.

Ah, I see - thanks for the help! We're talking to a real estate agent this week, so will talk w/ him about the options as well. Thanks for the insight!

It depends on your financial circumstances. In the event that renovations at the existing house take a while, and/or cost more than you expect, and/or the house doesn't sell as quickly as you would like, and/or you don't get a much as you want for it, can you handle the new mortgage for a number of months, and at a larger amount than you are thinking, without undue financial stress?

Yes, we can - we would have no problem w/ paying a mortgage for a while. Our current house realistically would likely sell for about $50,000 less than what we plan to buy. We are prepared for mortgage payments to pay the difference, as we have been putting into savings each month the same amount that we were paying towards our mortgage before we paid it off last year.

Sounds good, Jill. I just mentioned this because I was in a situation years ago where I had a paid-off house, and ended up buying another one with a closing date 3 months off. Unfortunately, the old house failed to sell by the time we moved in, and I had to get a huge, interest-only loan to close on the new house. For the next four months -- until the old house finally sold for $70K under our asking price and I liberated the equity -- I had a monthly loan payment of over $2000 that was doing nothing but covering the interest. We managed, but it was painful seeing that much money go down the drain every month.

I would get a mortgage banker (slightly different than broker) to ask about this..

We have done this. We used a local bank as we have one that doesn't charge an origin fee so closing costs are very small. The mortgage interest has been less than using an equity line. You also need to make sure that there are no prepayment penalties.

We have done it both ways. I really prefer to buy the new home and then sell the old one later. We rented our former home rather than selling it right away, the last time we bought a home first. It worked out well. I didn't have to stress about selling a house and buying a new one at the same time. With small children and moving, less stress is always better.

This last time we purchased a home, we did not have to stress about selling the old one, but we had a hard date to be out. It was more difficult than I had imagined. The slow move out works out better for us. I can't speak to the mortgage issues.

Usually, I mention your risk tolerance. But, if you can afford a mortgage and there is no mortgage on the first house, you have a very low risk situation. Talk to a mortgage broker about your options. It sounds like this is a doable proposition.

Yes, it does depend on your financial situation, but if you can afford to I would buy the new house before selling the old one, especially if you are at least somewhat specific in your wants/needs and especially especially if you live in a hot market. I guess if you don't have any specific needs and aren't too fussy about where you move it's not a big deal, but this usually isn't the case for non-first-timers. It is much harder to find a house in a desirable area than sell a house, in my area at least - by far. What are you going to do if you list your house eventually, it sells rather quickly, and you don't have a place to go to? You could rent, but is that something you really want to do?

What about renting out the current house after moving in the new house, let the renters pay for your new house mortgage.

bry has an excellent point. Pull the equity out of your current home so that when you close on the new home you will have better rate and terms without PMI than you would with only $20k down on a $350k purchase.

Then move into the new home at your own pace. Fix up the current home to sell and when you close on the 'old' home, that mortgage will be paid off. You can then decide to either pay down the new mortgage or keep the cash proceeds.

Where I live, it is almost preferable to buy first, to make sure you can get a house you want. It is so competitive, houses sell in hours.

It hasn't always been this way, just in the last year.

Don't talk to a real estate agent about this. Talk to a very experienced mortgage broker!

He probably bought and sold - it was two years ago.

Stax, that person has been known to spam in the past.... will probably edit the post to add the spam.

What about a bridge loan?

sushiepup-

It is possible to immediately flag a spammer yourself by clicking on the menu in the bottom corner of the offending post.

it takes more than one, and possibly more than two different people to flag a post before it is removed. Which is why I alert others. If possible, I delete my alert post when the spam is gone.

To me, a spammer is a person who is not asking, answering, or commenting on a legitimate question AND has a financial gain. I don't think I've seen any (or, at least, noticed) any on Houzz. Maybe sushipup2 is successful in getting them all deleted!

I think so. I didn't see one on this thread but I've seen them in the past. Consider yourself lucky not having to read their tosh.

: )