Louisville KY Real Estate Blog

How to Buy a New Home and THEN Sell Your Current One

What If I Need or Want to Buy A New Home without Selling My Old One?

Let's face it -- sometimes you would REALLY rather buy your new home before you sell your old one.  Maybe it's because you have a lot of pets that buyers won't love, or just that you want time to make a leisurely transition between old and new.

Full disclosure -- if you don't have excellent credit and the income to qualify for two home loans, you probably can't manage this.  However, if you do, read on!

Temporarily Carry Two Mortgages

You may be able to simply get another loan on the home you’re buying and keep the one you have.  Lenders will look at your debt-to-income ratios.  Your “front-end ratio” is the anticipated combined mortgage debt to your gross family income, and lender standards set this somewhere in the mid-30% range – 35-37%.  Your "back-end ratio" is all debt to gross income – usually something into the mid-forties is allowed. This includes both of your anticipated mortgages plus any auto, credit card payments, etc. (This is why your Realtor and Lender will advise you NOT to buy anything on credit while your loan is being processed.  You might accidentally exceed one of your ratios and not qualify for your mortgage!) 

If you get a new loan but intend to sell your old home and pay off the old loan, the ability to "re-amortize" your new loan is critical.  You can always pay down the principal of a mortgage whenever you want, but normally your payment will not change throughout the life of the loan.  If you have a right to re-amortize your new...

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