Buy A New House or Sell Your Old House First - Chicken Or The Egg?

The huge question looms: does one buy the new house first? Or sell the old one?

The second-or third-time buyer will need to consider the matter of an existing house, ongoing mortgage payments, and the cash needed for the down payment required to close on the new house. You have the money of course, there is real equity in your current home, but until that home is sold that cash is locked up securely in your current mortgage bank's vault.

So, what comes first, the chicken or the egg? Sell first, and, particularly in a sellers market, risk becoming homeless, or perhaps worse, moving in with the in-laws while the furniture is in storage

Or, in a buyers market, find the perfect house but you are unable to make an offer because your house might take a while to find a buyer.

What are my options?

Do your homework. Get pre-approved for a mortgage

• If you decide to own two homes, look into a refinance of your existing house which will give you the funds for the down payment of the new house.
• Arrange for a home equity line of credit. However, you must put that line of credit in place before listing your house. The bank will send out an appraiser and he will probably notice and report the sign on your front lawn.
• Arrange a bridge loan. However, a firm sale and purchase must exist.

Always be an informed client.

For more information contact your Toronto Mortgage Broker 

at 416-920-9931

Follow me on Twitter

Like us on Facebook