Bob Kieber
Special to the Daily

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November 3, 2012
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Financial Facts: How to buy before you sell

One of the many questions that I hear from prospective borrowers is how to buy that perfect new home prior to selling their current home. This is asked as many buyers want to move up into a newer or larger home, but their down payment is in the equity in their current home. I hope to give those of you who are thinking of a move a couple ideas that may work for you.

The easiest way for a potential buyer to place an offer on a new home and still currently remain a homeowner is to note in the contract that the purchase is subject to the sale of the current home. This notifies the seller that there are certain actions required by the buyer prior to the buyer having the ability to purchase the new home. Now this may prevent the seller from agreeing to the contract and the potential buyer may miss out on buying that perfect new home.

The next best thing a potential buyer can do is make an offer on the new home and extend the closing out as far as possible. This is also a difficult thing for the seller, as most sellers want to sell as soon as possible. But from a buyers prospective, it is worth a try to see if the seller will agree.

Then there is a way for a potential buyer to use the equity they have in their home to make the down payment on that new home. By setting up a second mortgage on the current home, the down payment is there to close the deal on the new home. This is one way to assure yourself that you do not loose out on buying that perfect new home. But this does have a downside. You now have at least three mortgages, two on your old home and one on your new home.

One suggestion is that if you can swing owning two homes, and the old one pays for itself by leasing it, you should consider this as a way to have equity grow with two homes instead of one.

So as you can see there are a couple of ways to buy that perfect new home even though you have not sold your current home. This is done all the time as we do not always have things occur as we want them to. There are even more ways to get into that new home, and you need to invest time with a full-time mortgage lender to learn how these things can occur. There are many ways to accomplish your goal of the new home. Call today for an appointment to see how your dream can really come true.

For answers to your mortgage related questions call Bob Kieber at (970) 453-4700 or email him at rkieber@centennialbanking.com. Bob is a local mortgage lender with Centennial Bank. He has

30-plus years of professional experience in real estate, finance and investments, and is a longtime resident of the High Country. Member FDIC, Equal Housing Lender. NMLS Bank #401640 Broker #289610. For tax benefit information please consult with a professional tax advisor. The opinions expressed are those of the individual, and do not necessarily reflect those of Centennial Bank.


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The Summit Daily Updated Nov 3, 2012 12:57AM Published Nov 3, 2012 12:55AM Copyright 2012 The Summit Daily. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.