Top 8 Ways to Buy and Sell a House at the Same Time in San Diego
Are you trying to buy a home, but you need to sell your home first? While we're covering eight different ways to buy and sell a home at the same time, hey everyone, this is Curtis Chism with the Chism team brokered by eXp Realty. And if you're looking to buy a home but you need to sell your home first, we're going to cover eight ways to make this happen for you. Just give me a call so we can chat about which options make the most sense for you. The first and most common thing people think of is to make a contingent offer on the sale of your current home. The way that this works is you make an offer on the home you want to buy, but you're saying you won't actually buy the home unless you can sell your current home first. This honestly only really works if we're in a buyer's market and sellers are willing to accept this. In the market that we're in now, this generally just isn't working, so we need to move on to some better options. The second option is to sell your home first and then negotiate a rent-back with a buyer of your home for a period of potentially up to two months. This gives you added flexibility and time to sell your home, search for and close on a new home. Now, you might get some of that rent back for free, or you might have to pay for some or all of that rent back. It'll just really depend on what we can negotiate with that buyer. The third option is to stay in a short-term rental after you sell your first home and before closing on your next home. This gives you anywhere from a few days to several months to go ahead and buy your new home. With either a rent back or a short-term rental option, you can actually find a new home while you're selling your existing home and get an escrow on it, and then close on the new home shortly after you sell your first home. You just need to wait to close until your current home has sold. This allows you to sell your home, unlock that equity, and then close on your new home. The downside is you need to move all your belongings into storage for that period of time that you're in that short-term rental. This method brings us to the fourth option, which uses a similar strategy to finding your new home, getting a new contract on that while under contract to sell your existing home, and that is a double close. So basically, you simply close escrow on the same day for both the home you're selling and buying. With the right title or Escrow Company, you can do this. However, everything has to go perfectly with both escrows to make this happen. And that brings us to a few other options that do carry some extra costs and paperwork but can make the whole process a little bit easier and less stressful. The first of these is to obtain a bridge loan. So, the bridge loan is where you get a second mortgage for most of your needed down payment to go purchase that new home. Then you sell your existing home, and then you refinance all of that into one mortgage. This allows you to buy a new home, move into the new home, and then work on selling your original home. Now, the complication here, of course, is you're paying two mortgages at one time. It's oftentimes difficult for folks to qualify for two mortgages at once, and there are certainly some costs associated with this. The second option using financing to make the move easier is to pull out a home equity line of credit or a HELOC on your existing home. If you have sufficient equity, you can use that equity to put a down payment on your new replacement home. However, again, you're going to have to qualify for two mortgages at the same time. The next option, which I find often is the best for a lot of folks, is a home trading program that I have access to. And that allows you to buy before you sell. So what happens is you qualify for the program through this home trading partner that we work with. So what they do is they unlock your equity in your existing home so that you can buy a new home. And then you go and purchase your replacement home first and then turn around and sell your existing home. So you don't have to carry two mortgages at one time, and you can even get a rent-back window. We can even couple it with a cash offer program to turn you from a finance purchaser into a cash offer buyer. That makes your offer extremely competitive, and you can get into your home quickly with fairly low fees. And finally, an eighth way is to actually not sell your home at all. So what you can do is buy a second home and rent out your existing home. You can count 75 percent of the rental income towards your income, helping you qualify for your second mortgage. So you can start building additional wealth through real estate. So if any of these options sound like a good option for you, just reach out to me so we can figure out what makes the most sense for you. And I look forward to helping you purchase your next Dream Home. Thank you.
Read MoreHigher Mortgage Rates for Great Credit Homebuyers in San Diego - Is it TRUE?
"Have you heard about the fee changes the government is making that may be causing people with higher credit scores to pay more to help people with low credit scores? In this video, we're going to dive in to find out if this is really true and break down what it all really means for you when you're buying a home. So, the story here is that Fannie Mae and Freddie Mac changed the fees that they charge on loans that, on the surface, appear to make people with higher credit scores pay more in fees to offset costs for people with lower credit scores. Basically, the perception is people with higher credit scores and higher down payments are now getting penalized in order to help people with lower credit scores and lower down payments buy homes. This has led people to think that if you have a lower credit score, you'll pay less in overall fees, and there were even people suggesting that you should purposely damage and lower your credit score to pay less in fees. So let's just say upfront, please do not do that because that's just not true, and damaging your credit score will definitely cost you. Now, this policy change really has caused a lot of confusion since conflicting messages have been presented by different groups for the reason behind these moves. First, we've got Fannie Mae and Freddie Mac stating categorically the reason for the changes is not at all to encourage purchases of homes by lower credit borrowers or to penalize higher credit borrowers. But then we've got industry groups like The National Association of Realtors coming out saying that this is the reason, and they're encouraging the government to scrap these fee increases. So let me try to clear up this confusion for you. Well, first, who exactly is Fannie Mae and Freddie Mac, and why are they charging fees on loans? No, they're not your great aunt or uncle that you've never heard of. They are the government-run corporations responsible for ensuring the majority of mortgages made in America. By ensuring, it means that they step in to help pay back the companies actually lending the money for home purchases if that home buyer defaults on the loan. Now they have to maintain a certain amount of money in their accounts to maintain what's called liquidity, to make sure that if people do default, they have the funds to pay out the money. Now, in order to maintain those cash reserves, they charge certain fees on home loans. So why did they actually make this change? Well, essentially, in 2008, after the last market crash, Fannie Mae and Freddie Mac were taken into conservatorship, and they called this combined entity the Enterprises. They have to charge fees on loans in order to provide a form of insurance to ensure the taxpayers that now own Fannie Mae and Freddie Mac in case of default of these higher risk borrowers. Over the past couple of years, Fannie Mae and Freddie Mac did a huge risk assessment and realized the existing fee structure didn't accurately reflect the risk profile for each borrower. So basically, what they are saying is that the fee structure that they had implemented after the 2008 crisis was simply outdated, and it wasn't actually working quite well enough to maintain the needed liquidity in the system. They had to restructure the fees according to each individual class of borrower's risk based on credit score, down payment, debt-to-income ratios, and income levels, in order to provide liquidity to Fannie Mae and Freddie Mac and to make sure the taxpayers didn't end up on the hook again for another potential crash. So, they have been undergoing an overhaul to adjust fees and have been making these adjustments on different loan types for about the past two years, for loans like second homes, high-balance loans, and cash-out refinances. Now, this was basically the final stage in that risk rebalancing. On the surface, it does appear that they are passing the risk of the lower credit borrowers onto higher credit borrowers, but it appears that may have simply just been an unintended consequence of the risk rebalancing. It appears simply that overall, the higher credit score borrowers simply weren't being charged enough in the first place in accordance with the risk profile. So they had to rebalance risk to maintain overall stability and liquidity of the system to help prevent a catastrophe like what happened in the 2008 housing crisis. Now, here's the gist of this: You're still going to be far better off to put at least a 20 percent down payment and have a higher credit score. Now, when you look at the table here, your overall fees are going to be much lower if you have a higher credit score and a 20 percent down payment than if you have a lower credit score and a lower down payment. By putting 20 percent down, you'll avoid having to pay mortgage insurance, which is typically going to be hundreds of dollars per month to your mortgage payment. So, whatever you do, please don't damage your credit score to avoid paying higher fees. Now, are you paying a higher fee if you have a higher credit score? Well, maybe, but it just depends on where you fall on the fee schedule and how much you'll actually be paying. So, here's what you need to do if you're looking at buying a home: just reach out to me, and I'll put you in touch with a great local lender that I work with who can help you get a great rate on a loan no matter what your credit score happens to be."
Read MoreHow to Use a VA Loan to Buy an Investment Property in San Diego
Did you know you can use your VA loan to buy an investment property? We’re diving into exactly how you do that in this video. (Watch my short video) Hey, there are you a veteran looking to purchase a second home or investment property while I'm going to break down exactly how you can do this in this video so you can start building Financial Freedom through real estate first, my name is Curtis Chism with the Chism team brokered by exp realty and if you are a veteran looking to buy your first home or second home as an investment property just give me a call, text or email and let's chat about it. Now as veterans you’re entitled to certain benefits when it comes to buying a home one of these benefits is the VA loan which allows you to buy a home with a zero-dollar down payment and no private mortgage insurance which can save you hundreds of dollars a month on your payment what did you also know that you can use that VA loan purchase a second home. Yeah, it's actually true with your full entitlement you can finance a second home just like your primary residence. So this allows you to move into the second home rent out your existing home and start building lasting wealth through real estate. First, let’s explain what your full entitlement means, your full entitlement is the amount that VA guarantees to a lender on your behalf it’s the maximum amount the VA will pay if you default on your loan. If you have a VA loan that started before January 1st, 2020, then you may have some limits on your loan based on your county loan limits. However, for any loan made after 2020, there is no limit on the entitlement in other words the VA doesn’t place a limit on how much you can borrow however you can’t just go borrow millions of dollars to buy homes. You’ll be limited by how much your lender will allow you to borrow so what they’ll do is they’ll make sure that you can actually afford the home that you’re buying and to look at things like income, credit, and employment. The cool thing about buying a second home with the VA loan is that they can count 75% of the projected rental income from your first home as part of your income. This is going to help qualify AI to purchase that second home much more easily. Now to use your full entitlement to buy a second home you do have to meet certain requirements. First You must have used your VA loan eligibility to purchase your primary residence something you lived in so that means you actually have to have lived in that home for at least 12 months before renting it out. You can buy that second home and finance up to 100 of the home’s value with no down payment required. You also don’t have to pay private mortgage insurance which as I said can save you hundreds of dollars every single month. Keep in mind you can always bring in additional down payment money to purchase a second home if the lender won’t lend the full amount. In other words, if you’re buying an eight hundred thousand dollar second home and the lender will only lend seven hundred thousand dollars you can bring in the additional one hundred thousand dollars to cover the difference. If you’re a veteran looking to build Financial freedom through real estate this is how you can buy a second home to live in and rent out your first home, If you’re looking to buy your first or second home using VA benefits reach out to me so we can chat through all the specifics of your situation and I’ll get you in touch with an awesome local lender that can help make all of this happen.
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