Real Estate

How does Selling and buying a new house work?

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  • Apr 18th, 2016 4:12 pm
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[OP]
Deal Addict
Nov 11, 2004
3197 posts
343 upvotes
Ottawa

How does Selling and buying a new house work?

Anyone have any experience of Selling there house and buying a new one.

How do you have the $ to buy the new one?

Like it would be impossible to have them close on the same date, and even then you need to move all of your stuff out?

Anyone know how this works?

Or can help me understand the process?
Hello
11 replies
Deal Addict
Apr 4, 2013
1274 posts
408 upvotes
Are you buying a newly built house or just another house?

Newly built houses are like most any house purchase in that you know the closing date upfront.
Deal Addict
Jul 6, 2005
3997 posts
1434 upvotes
Toronto
is this thread for real? These can't be real questions.
Deal Addict
User avatar
Dec 21, 2010
1592 posts
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GTA
cbr663 wrote:
Newly built houses are like most any house purchase in that you know the closing date upfront.
Exactly.


Except for delays. Because, well, I have yet to see a new build close on the scheduled date.

FWIW, most often you can bridge the closing dates so that they overlap.
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Sr. Member
May 9, 2006
870 posts
183 upvotes
Mississauga
Repooc wrote: is this thread for real? These can't be real questions.
I personally think no question is bad question. He is RFD user for long , I am sure he doesn't know this house purchase process. no harm in asking. RFD has lot of experts that really do help out noobs in every field. Not everyone know everything my humble opinion.
[OP]
Deal Addict
Nov 11, 2004
3197 posts
343 upvotes
Ottawa
No honestly i dont know...

I looked into it today

Sounds like.

You get a Heloc on current house for payment on new house...

Pay interest on Heloc until old House sells

That sound about right?
Hello
Deal Guru
User avatar
Mar 23, 2008
12427 posts
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Edmonton
ilusa wrote: No honestly i dont know...

I looked into it today

Sounds like.

You get a Heloc on current house for payment on new house...

Pay interest on Heloc until old House sells

That sound about right?
You need to sit down and talk to your banker/mortgage broker. You can only borrow so much on a HELOC, and often people's new homes are more expensive than their old ones. You'll need to run some numbers and see what your options are.

C
Deal Fanatic
Mar 27, 2004
5691 posts
3575 upvotes
Toronto
ilusa wrote: Anyone have any experience of Selling there house and buying a new one.

How do you have the $ to buy the new one?

Like it would be impossible to have them close on the same date, and even then you need to move all of your stuff out?

Anyone know how this works?

Or can help me understand the process?
Hey

You get bridge financing. You have the new house you are buying close first so that you can move in. The bank will give you loan to cover the few days when you are holding a mortgage on both properties.
Full-time Realtor
Deal Fanatic
Jan 18, 2003
5900 posts
1677 upvotes
Mississauga
ilusa wrote: No honestly i dont know...

I looked into it today

Sounds like.

You get a Heloc on current house for payment on new house...

Pay interest on Heloc until old House sells

That sound about right?
The problem with your method is that you will need to qualify for the mortgage of the new house knowing that your down payment is from your current house... Meaning you will be able to borrow less than if you did bridge financing

Because the bank doesn't know what you will do with the money later on when you sell your current house...

With bridge financing, the bank will know that the $$ from the sale of your home will be put into the new home... So you should be able to get a larger mortgage...

I hope i am correct....
[OP]
Deal Addict
Nov 11, 2004
3197 posts
343 upvotes
Ottawa
Who Do you speak to about this to have it all planned out?

As im still lost

A mortgage Broker?
Hello
Deal Addict
Dec 28, 2002
2962 posts
300 upvotes
ilusa wrote: Who Do you speak to about this to have it all planned out?

As im still lost

A mortgage Broker?
yes, any mortgage specialist.
Deal Addict
User avatar
Aug 14, 2006
1214 posts
418 upvotes
GTA
Step 1: Ask your bank if you can port your existing mortgage. If not, you might have to pay penalties.
Step 2: See how much you're eligible for in the 'new' mtg.
Step 3: Identify bridge financing opportunities.
Step 4: Close deal on new house
Step 5: Sell existing house.

Make sure the closing date from Step 4 is earlier than date for Step 5 so you'll have somewhere to live. You'll be charged interest for the days between Step 4 and Step 5. If you can't do bridge financing or other means for your closing dates to work out where new house is earlier than old house, you might just take a hit and pay the penalties to the buyers of your house for the delay.

I don't think there's a one-size fits all solution to this situation though as all mortgage agreements vary a little bit and it depends on when/with whom you got your original mortgage with. Either way, step 1 should always be to call the issuer of your mortgage to see what options you have with your existing mortgagor.

For more information, see below:
https://www.integratedmortgageplanners. ... t-overlap/

Good luck!

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