So you have decided you would like to buy a home in the Mandeville Louisiana area. Congratulations. You have chosen an area that has something for everyone, from outdoor activities to cultural activities.
Water lovers, especially swimmers and boaters, will love the open waterways Mandeville Louisiana has to offer, particularly Lake Pontchatrain. Nature lovers will love Mandeville Louisiana for the bird sanctuaries. Amphitheaters, depot museums, farmers’ markets, and shopping areas add to the list of things to do in Mandeville Louisiana. Music lovers rejoice in the fact that Mandeville Louisiana has a history rich in jazz, as it was one of the first places where it was heard outside of New Orleans.
After experiencing the rich culture of Mandeville Louisiana, you have fallen in love with a wonderful home that you cannot wait to purchase, even despite the fact that you have not sold your current home. Now you have some serious questions to ask yourself:
- Can you afford to make two mortgage payments based on your expected salary and other savings or income?
- Are you willing to risk the housing market taking a downturn, which could leave your house worth less than the selling price?
- Does there appear to be a lack of buyers in the current housing market in Mandeville Louisiana?
- What will the process of applying for the mortgage on the new house be like, considering you are still paying on your current home’s mortgage?
- There are several options you may consider when purchasing a new home in Mandeville Louisana, while still paying on your current home’s mortgage, including:
Taking on Tenants
Ideally, most people do not even attempt to purchase a new home in Mandeville Louisiana without out attempting to sell their current home first. However, in the rare occasion that they do decide to purchase a new home before they sell their current home, many will consider taking on tenants to rent their current home to help them offset the financial strain of paying on two mortgages. While the thought of people moving into your home and paying your rent may seem like a simple solution to solving your issue of paying on two mortgages, in the long run, it may cause you problems.
Your tenants may not be the most cooperative people, when it comes to cleaning the house or leaving the house during a scheduled showing. In fact, some tenants may even benefit from doing everything possible to delay the sale of your home, especially if it means they do not have to worry about looking for a new place to live.
Taking on tenants also runs the risk that they will not keep up with and take care of your home as well as you do. You may have to make necessary repairs or complete a thorough cleaning before you can even consider selling your home to a potential buyer.
Bridge Loan
A bridge loan, sometimes called a “swing” loan, provides funds needed for a short period of time until a buyer can find another source of funds. It allows a home buyer to find equity in their old home to help pay for the new one. It also allows them to close on their new home before the sale of their old home is closes. Under a bridge loan, lenders allow payments to begin on your new home only after your old home sells.
Interest rates with bridge loans may be higher than any other type of loan, but the interest will not amount to much, since this is a short term loan.
If your current house is under contract, you will want to take an unsecured bridge loan. However, if your current house is on the market and unsold, you will want to take a secured bridge loan.
Home Equity Loan
Most banks can be eager to grant potential new home buyers in Mandeville Louisiana home equity loans, and most are financed at the lender’s expense. Home equity loans are a profitable, stand-alone business, however, most home equity lenders will not be looking to get your business when you do need a purchase loan. Before you are granted a home equity loan, the bank with send out an appraiser, and you will need to be completely honest about your financial and current home situations.
Once approved, you will not be charged any fees associated with the home equity loan until you actually draw down the funds, and you must put the loan in place before listing your home.
If your current home is not currently listed on the market, a home equity loan may be the perfect option for you. To learn more about buying a house before selling your home, contact Louisiana real estate agents at The Mixon Team by calling 985-277-1063.
