Mortgage Question

[djb750]

My wife and I are looking to move to another home.

Our current home is paid off and would probably sell for $220,000.
And we have the funds for a down-payment on a new home and would be approved, etc. New home value could be $320,000

I don't see any other way except to purchase the new home first, then sell our existing (too much crap and nowhere to put it).

Also, I'm not gonna do anything more than a 10-year fixed.

So the ideal scenario for us would be to get a 10-year fixed on roughly $60-80k, versus a 10-year fixed on $320K (less down payment) and then just paying down the principle after the sale of the house. I want more cash freed up in the interim.

What types of loan programs are available? Is home equity the way to go?

I'm gonna speak to my bank, but I'm asking here as I begin to research what is out there and surely someone here has been there and done this.

thanks!

[GJA]

Make sure you own 20% or more to avoid PMI.

Good luck!

[northstar]

You will need to finance the full amount of the house minus your down payment in order to close. You could then sell your existing house and then put that cash towards your principle. Rates on home equity loans are rediculous compared to a fixed rate 15 year.

[djb750]

You will need to finance the full amount of the house minus your down payment in order to close. You could then sell your existing house and then put that cash towards your principle. Rates on home equity loans are rediculous compared to a fixed rate 15 year.

I would only do it that way if the funds from the sale of my existing house paid off the new loan entirely. Otherwise, even if I paid off a huge chunk of the principle on the new loan from selling my existing house, I'm still gonna have a monster monthly payment for at least several years.

I haven't had a house payment in a while and, I suppose it's just me, but it's a relief to have the cash freed up. I don't wanna tie that much money up in a monthly payment anymore.

I think we're just gonna have to figure out a way to sell our existing house first. I don't mind taking out another mortgage, but one way or another I'm gonna put 75-80% down UP FRONT.

[Matt D]

The other way to do it is once your current house is sold and that money put against the new house refinance the remaining balance for 10 years and your payment would be where you want it. If same bank won’t need another appraisal and costs to do so should be cheap. When we bought our lake house we refinanced twice in the first 15–18 months because rates kept dropping and costs to refinance were low and it made sense to do it. Ended up being able to go to a 10 year loan when all done and said.

[JohnN]

I did this. I understand you want a 10-year mortgage payment on a balance of maybe $100,000 - you don't want to get stuck with a high monthly payment.

You could get a 30 year loan. This would allow you to have a lower monthly payment. Once you sell your old house you can put the proceeds toward your mortgage balance and make the payment necessary to pay off the balance in 10 years. The only real drawback here is that the 30 year loan will have a higher interest rate than a 10 year loan (and you'll have to be disciplined about making the payments on a 10 year schedule).

You could get two loans when you buy the new house, and pay one of them off when you sell the old house. Not sure if you'll be able to make this option work given the fact that you'd want to pay off the larger loan, and this is traditionally done with a HELOC on top of a traditional mortgage. There will be additional loan fees involved, but might not be terrible.

The last option that comes to mind is to simply refinance your new house when you sell your old house. The drawback will be the refinancing fees.

Hope this helps.

[Dixie-Raven]

Sell your current house and while waiting for it to sell start downsizing what you have to move. Whatever is left over find somewhere to store cheap until you find another home to purchase.

[Coastal Mountaineer]

Sell your current house and while waiting for it to sell start downsizing what you have to move. Whatever is left over find somewhere to store cheap until you find another home to purchase.

This. Today's housing market is very hot. Being so close to Greenville and selling your house that's in an affordable price range, it should go fast. Contact a realtor now, follow their advice on getting house in selling shape, and begin packing now. If you have to, rent storage. Storage costs will be a lot less than any combination of mortgages will cost.

[Walleyesok]

I would refinance current home to the max approximately $170,000.
Take that plus your current down payment assuming $64,000.
You would have approx $240,000.

Cash out Refinance of current home 170k closing fees of 5,500 and 30 year 2.83% 718.5 month

Finance another 80k against new home. Currently 30 year is 2.83% closing fees 4k and 326.59 monthly and 15 year is 2.55% and 528.74 monthly.





Since you are likely to overlap mortgages for a bit and pay them off quickly I would go 30 year on both.

During small overlap period you would have $1,044 a month. Once sold down to $327.

personally I would then rent the old home out and cover both mortgages! Then have a headache with all the disrespectful tenants!

[Prohawg]

Purchase your new home and make sure the bank you are financing it with allows you to recast your mortgage. This means your rate and term remain the same, and it just reduces your principle by how much you put towards the recast. So, when you sell your current home, you can put the money towards your new mortgage. Your payment will be reduced depending on how much $ your put towards the principle. Some banks offer this free and some will charge a fee. I’m not sure if all banks will do this.

[idbefishing]

If you have the down payment and the income to be approved for a new loan I’d get a 30 yrs. Pay down a large chunk of principal after the sale of the old house. After that, your monthly payment would be mostly principal then you’ll likely pay off in 10 yrs anyway?

[apenland01]

Pull all important documents and items from the current house. Set fire to it. Then after the insurance payment hits, live in a camper or tent until the housing market crashes in a year or so. Buy better house at a cheaper price.

[Drothgeb]

I have done this a few times, usually when building a new house. I normally refinance the current house to get operating cash for the new build/buy. Once the new house is ready, I just get a conventional loan on it. When the old house has sells, the refinance loan is paid off, and I use extra cash (if there is any) to pay down the loan on the new house. Depending on the rates, I may also refinance.

[06 SB]

This is not too hard. Use your current down payment dollars for the new house. If it is not the full 20% then do a home equity loan for the difference. Buy the new house using whatever terms you want. It is not all that important as these loan terms will not last too long but make sure you can RECAST the loan. Now sell the old house. Get with the lender and recast the loan with new terms, based on the remaining balance.

[JohnN]

If you can get a loan with a recast option, that's a really good solution.

[Bill2e]

It's really just math.

Buy your new house with 20% down on a 30 year loan.

Sell current house and pay down the principal on the new house.

Take the remaining balance, figure out how loan you want to take to pay off and adjust you payment accordingly.

There is a loan template in Excel that will give you an amortization schedule, play with the payments and extra principal to get the numbers where you want them.

DO NOT TAKE A MORTGAGE ON CURRENT HOUSE AND NEW HOUSE, the fees will be much higher that way.

[bassdge]

Recast option is most efficient and cost effective option

[NAMVET1968]

Pull all important documents and items from the current house. Set fire to it. Then after the insurance payment hits, live in a camper or tent until the housing market crashes in a year or so. Buy better house at a cheaper price.

[Trent R]

Sell your current house and rent it from the new owner as part of the sales arrangement. New owner must honor any previous leases.

[Nickking2785]

I believe it’s called a bridge loan. I did it. Basically the bank fronts the money for up to 1 year. So you tell the. How your going to finance the new home (10 year 100k down) and they will right the loan up that way and bridge it to your existing home. Do your research. I did it a few years ago and it worked great. There is risk. You have 1 year or you really loose your ass. I sold me existing house very quickly after I bought my new so I only made 1 or 2 payments on the bridge loan