What to Expect When Financing a New Home and Selling Your Existing One
This guide will walk you through the process of financing a new home purchase and provide insights on what to expect when selling your existing home.
Understanding the Home Financing Process
Step 1: Assess Your Financial Readiness - Review your income, expenses, and credit history. - Determine your debt-to-income (DTI) ratio. - Collect essential documents: W-2s, tax returns, pay stubs, and bank statements.
Step 2: Get Pre-Approved for a Mortgage - Contact a reputable lender or mortgage broker. - Pre-approval helps you: • Understand your budget. • Strengthen your offer to sellers. • Estimate down payment and closing costs.
Step 3: Explore Loan Options - Conventional, FHA, VA, and USDA loans each have unique benefits.
Step 4: Make an Offer and Secure Financing - Provide your lender with the purchase contract. - Lock in your interest rate (if available).
Step 5: Underwriting and Appraisal - Lender reviews your financials in detail. - Appraisal confirms the property value.
Step 6: Closing on Your New Home - Review closing disclosure. - Sign documents and receive keys. 2.
Selling Your Existing Home
Step 1: Determine Your Home’s Market Value - Work with a real estate agent for a Comparative Market Analysis (CMA).
Step 2: Prepare Your Home for Sale - Declutter, deep clean, and make necessary repairs.
Step 3: List and Market Your Home - Professional marketing attracts buyers.
Step 4: Coordinate the Timing - Consider contingency offers, bridge loans, or temporary housing.
Step 5: Closing the Sale - Negotiate inspection items and close on your home. - Use proceeds as a down payment for your next purchase.
Key Tips for a Smooth Transition:
Communicate regularly with your lender and agent.
Avoid major financial changes during the process.
Budget for moving costs and possible overlap of housing expenses.
Financing a new home while selling an existing one involves planning, timing, and the right team of professionals.
With the right preparation, you can transition seamlessly into your next chapter.
More questions, or need more information on a qualified lender? Contact:
Chris Miller REALTOR®