Buying and Selling Home (loan, escrow, real estate, loan)

[armenh]

I had a general question, as I will be entering the Real Estate market soon. Let's say an individual owns their home outright, and they are looking to purchase a more expensive home. Here's the catch, they do not want to sell their current home until, they have closed escrow in the other home, to ensure they won't have to rent or stay "homeless".

They do have cash on the side, enough for a downpayment on the new home they want to purchase but they are looking to put a very high down payment, around 40%-50% LTV.

They can though put the initial 20 percent down on the new home. Then after selling their home, they can bring in the rest of the cash money to cover the full downpayment they intially wanted to put. Besides adding an addendum, what can be done on the loan agents end? Are there special loan programs for this? Because I am sure many homeowners would not be willing to wait until the buyer sells their existing home...

[acegolfer]

I have not heard of such a special program.

They need to get a regular loan with 20% down. After they close the old house, they can make a lumpsum principal payment.

Make sure they don't pay any points to lower the mortgage rate. If they do, they are wasting a lot of money up front.

[ShanetheMortgageMan]

What you need to do is after the existing home sells, when you send in the additional money to pay down the principal, ask for your loan to be "recast" which means that your new payment would be based on the loan amount after the pay down, but amortized over the remaining term of the loan.