Buy a New Home or Sell Your Old One First?
When people make the decision to leave their old home behind and get a new home, they are often conflicted on whether to sell their home first and then buy a new one, or to buy a house for sale first and sell their old home later. There is no way of knowing what the absolute right answer is for everyone because both of these options have their pluses and minuses. Some of these points are shown below in order to help you make a decision that would suit your situation best.
SELL FIRST
Advantages
€ If your money for buying a new house isn't enough, selling your old house first can earn you what you need.
€ There is no need for you to pay for another mortgage if you still owe money on your original home.
€ After selling your home and seeing how much you earned from it, you'll be able to know your price range while checking out houses for sale.
Disadvantages
€ If your home's closing date arrives before you are able to close a deal on the house you are buying, you'll have no place to live in for now.
€ Even if you can rent or stay with family or friends while buying your new home, where would you place your furniture and other personal belongings for the time being?
€ You'll be moving from one house to another two times, and this is something not to be taken lightly if you have a huge family.
BUY FIRST
Advantages
€ Because no one is pressuring you to pack up and move out of your house, you can take your time in looking for the house you want.
€ The only move you'll need to make is from your old house to your new house.
Disadvantages
€ If you need the money from selling your old home to buy your new one, you'll have a hard time just handing over the down payment for the new house. Also, if you are in a hurry to meet the date of settlement on the new house, you might have to sell your old house for less than your asking price.
€ If you managed to buy a house before selling, you'll be paying two mortgages. If your finances are not enough to do this, you might be forced to get a bridging loan, which is another loan to worry about.
Basically, this all boils down to what you need at the moment. Figure out if you'd rather have no house for the time being, or pay for two houses at the same time. In addition, figure out if you need the money from selling your old house in order to pay for the new house.
SELL FIRST
Advantages
€ If your money for buying a new house isn't enough, selling your old house first can earn you what you need.
€ There is no need for you to pay for another mortgage if you still owe money on your original home.
€ After selling your home and seeing how much you earned from it, you'll be able to know your price range while checking out houses for sale.
Disadvantages
€ If your home's closing date arrives before you are able to close a deal on the house you are buying, you'll have no place to live in for now.
€ Even if you can rent or stay with family or friends while buying your new home, where would you place your furniture and other personal belongings for the time being?
€ You'll be moving from one house to another two times, and this is something not to be taken lightly if you have a huge family.
BUY FIRST
Advantages
€ Because no one is pressuring you to pack up and move out of your house, you can take your time in looking for the house you want.
€ The only move you'll need to make is from your old house to your new house.
Disadvantages
€ If you need the money from selling your old home to buy your new one, you'll have a hard time just handing over the down payment for the new house. Also, if you are in a hurry to meet the date of settlement on the new house, you might have to sell your old house for less than your asking price.
€ If you managed to buy a house before selling, you'll be paying two mortgages. If your finances are not enough to do this, you might be forced to get a bridging loan, which is another loan to worry about.
Basically, this all boils down to what you need at the moment. Figure out if you'd rather have no house for the time being, or pay for two houses at the same time. In addition, figure out if you need the money from selling your old house in order to pay for the new house.
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