So you’ve found your dream home. There’s just one problem: You haven’t been able to sell your condo yet. So what do you do? In this article, we hope to help you figure out how to move if your condo hasn’t sold yet in CA.
Moving can be tough when you are trying to buy and sell a property all at once. FHA, Fanny Mae, and Freddie Mac all have rules about getting a second mortgage while you still own your condo. If you want to secure an additional mortgage, you will have to clear a few hurdles.
How to Move if your Condo Hasn’t Sold Yet in CA
First off, to qualify for a second mortgage through the FHA, you must meet certain qualifications.
You need to have a good reason for needing to move right away, and not after your current condo has sold. For example, moving because your family needs a larger space, you are separating from your spouse or for work purposes.
Also, you cannot owe more than 75% of the value of the first property. There are additional restrictions as well, do your homework before assuming you will qualify for an additional loan through the FHA.
Asking family can be another route, so long as you put everything in writing.
Agree to pay them back in full upon the sale of your first condo. Whenever you borrow money from family, you want clear terms to be set and adhered to.
If you think a family relationship could be damaged because of money, you might want to look for a different way to secure the financing you need.
A bridge loan or as it’s sometimes called, a “wrap” loan can help “bridge the gap while you attempt to cover two mortgage payments.
These types of loans will take both mortgage payments, and combine them into one interest-only payment. These are typically short-term loans, lasting 6 months to one year.
Lenders have different requirements, but you must typically have great credit and be financing less than 80% of the value of both properties.
While it may not be your first choice, you can talk to your boss or plan administrator about borrowing from your 401k.
Make sure you understand how the tax penalties will work, and pay yourself back after the sale of the original home. This may not be an option for everyone, but definitely, something to look into.
Try to offer the seller of the second home, the option to rent it back from you for a few months.
Depending on their situation, they might love the idea of being able to stay in their home while they shop for a new one. If you are attempting to carry two mortgages, this is a great way to alleviate the cost.
Add in a contingency in your offer allowing you to close on the new property, only after your condo has sold.
If your condo is new to the market and priced well, it should sell right away. Present this to the owners of the second home, along with your offer. Ensure them that the closing won’t be delayed and that you agree to close in a certain amount of time
If you are looking to sell your condo, we can help! Fill out this short form, or give our office a call today! (714) 576-6282