One of the least ideal situations when searching for a new home is finding one without any leads on the one you are living in, but can happen a lot. It puts you and your family in a tough place. Most people can’t afford two mortgages, so what do you do? Pass on the house of your dreams? There is a lot to consider and your local Colorado Springs real estate expert can help provide you with alternatives to make the situation work.
1. Assess your situation
One of the best things you can do if you have found a new home is assess your situation. You will need to work with your realtor and lender to determine how much your mortgage and any other fees, such as an HOA, will be. Next, review your finances and see if you can make that double payment? You may have to make the double payment for several months so it is important that you can live comfortably in the event the home does not sell quickly. Also, review your debt-to-income ratio. If it is higher than 40 percent, you may be in dangerous territory and may not be able to purchase based on the lender.
If you aren’t ready to give up on your dream home, there are some options you can consider. First, talk to your realtor about a contingency. In Investopedia’s, Home Sale Contingencies: What Buyers and Sellers Need to Know, they explain you can put a contingency in your contract that the deal can go through if the buyer’s home sells by a certain date. This will protect you from other buyers from coming in and making an offer. Another top option could be renting out your home. If your area is not selling well, renting could be a good option that may even supplement your income. However, that income can’t necessarily be claimed right away so you will have to prove to your lender you can make the double payments.
3. Take it or leave it
Ultimately, it will be your choice to decide if you can handle two mortgages. If you have any hesitations, it may be in your best interest to hold off until your home sells. It can be frustrating, but may prevent you from a stressful financial situation. On the flipside, if you sell before you buy, that can also be frustrating to find a temporary living situation. Evaluate the quality of life through this transition. You can decide to put everything you have in storage and move into a completely furnished option, or just find a rental opportunity that works for you.
As you decide if you can juggle two homes, Marianne Farrell at Berkshire Hathaway is your premier go-to real estate agency. If you are struggling selling your home, learn the main reasons your house is not selling without a realtor
. You can work with Marianne Farrell at Berkshire Hathaway on the sale of your current home and guidance if you find the new home of your dreams if your other has not yet sold. Call us at 303-796-7000 to get started!