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Old 08-21-2013, 10:36 AM
 
47 posts, read 99,666 times
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We are currently in a townhome in Fairfax/Vienna area that we bought a few years ago. It's a decent-sized townhome but it will be too small when we have another kid. Our townhome worth about $700K right now and we have eyed on either a larger townhome or SFH in Vienna/Oakton around $1M. How do people actually do this? Do you need to have enough income to cover two mortgages? how much money do we need to really have to be able to do this -- $300K? Do people sell the current home, move to a rental and then buy a new one?
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Old 08-21-2013, 10:49 AM
 
Location: Annandale, VA
5,098 posts, read 4,310,165 times
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I have done it over four times. You time the sale of your existing home to the closing on your new home.
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Old 08-21-2013, 11:03 AM
 
109 posts, read 126,248 times
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You write a contract that is contingent upon the sale of your home.

But good luck finding a seller that'll agree to it lol...
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Old 08-21-2013, 11:07 AM
 
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We are in the midst of a similar transition, though from condo to townhouse and at lower price points. As our agent said it comes down to which scares you more...being homeless or carrying two mortgages.

It is very true that the market in this area this year has been pretty hostile to purchase offers contingent on the sale of you prior home. You have have more luck selling your place and getting the buyer to rent it back to you for an extra month - that would give you about two months to find the house to buy.

Of course if you want a mortgage on the new house before you've closed your sale, your income ratios, other cash for down payment, and money in the bank to carry both mortgages for 6 months must be satisfactory.
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Old 08-21-2013, 11:37 AM
 
Location: Fairfax, VA
1,449 posts, read 2,807,340 times
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Quote:
Originally Posted by acgood View Post
We are in the midst of a similar transition, though from condo to townhouse and at lower price points. As our agent said it comes down to which scares you more...being homeless or carrying two mortgages.

It is very true that the market in this area this year has been pretty hostile to purchase offers contingent on the sale of you prior home. You have have more luck selling your place and getting the buyer to rent it back to you for an extra month - that would give you about two months to find the house to buy.

Of course if you want a mortgage on the new house before you've closed your sale, your income ratios, other cash for down payment, and money in the bank to carry both mortgages for 6 months must be satisfactory.
what acgood said.

we qualified to carry 2 mortgages - even though we knew it wasn't really feasible as a long term thing. We also used a VA Loan, which is incredibly flexible. We could have done a 0 down loan if we'd wanted.

We used savings for the earnest payment and were prepared to take some money out of savings if needed to come up with some down payment. The VA Loan allowed you a window of time to adjust your mortgage without refinancing (so, we could have put down 5% for the best rate and then put down additional funds to lower our mortgage payment when our TH sold, if it had come to that).


We wound up selling our TH very quickly and had both closings on the same day (sale in the morning, purchase in the afternoon). We stayed in a hotel for one night while our moving company kept our stuff in storage.

A friend of mine just did something similar - won the contract on the next house, then sold her current TH in a couple days.
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Old 08-21-2013, 12:00 PM
 
1,287 posts, read 1,734,969 times
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We knew our TH would sell very quickly since there wasn't much on the market at the time. We had our realtor put in the comments that we would need a 3 month rent back. I'm really glad he did that since finding a SFH at the time was challenging. I would talk a realtor that really knows and sells in your area and go and look at what's on the market. What you find may surprise you and could potentially change your perspective.
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Old 08-21-2013, 12:44 PM
 
Location: Ashburn, VA
989 posts, read 2,473,063 times
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We've had neighbors move out into apartments for the short term. I guess it helped their stress levels.
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Old 08-21-2013, 01:38 PM
 
147 posts, read 237,799 times
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done this in the past and carried two mortgages. bank account hurts but makes life easier than having to deal with last min scramble to buy a new house taking into account unless you are all cash (which you are not) closing will take 30+ days.

you don't need 300K in salary to make this work unless you are financing over 90% on each property. I would concur with paul on having a hard time on making your purchase contingent on a sale of your existing home. property in NoVa is flying off the shelves with many homes getting multiple bids. a contingency will all but kill your chances on getting a house
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Old 08-21-2013, 02:07 PM
 
504 posts, read 1,026,835 times
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We have just done it. We chose to be homeless (it turned out to be 3 months+ because we have narrow search focus) rather than juggling two mortgages. Besides, with your home sale under your belt, you would be in a much stronger buy position (no contingency on selling your home first; and with equity in hand it's easier to compete/bid on something popular).

My own lesson-learned: if you go this route, take a hard look at your belongings and furniture. Throw them out, sell them or give to charities. If you upgrade into a bigger home, chances are some of the old stuff won't fit/match and you will end up buying something new. Don't waste your money on them on storage fees, and on efforts to move them.
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Old 08-21-2013, 03:46 PM
 
371 posts, read 732,244 times
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Luckily, I have parents with a fairly large house in the area, so when I sold my townhouse in 2010, the wife, kids, and myself moved in with my parents, stored our stuff in their basement for about 2 months. We didn't want to get stuck with two houses.

Since I wanted to use the equity I had in the townhouse as a down payment for the new house, this worked out perfectly. Not sure what I would have done if I didn't have this option.
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