Buying a home when you have one

The home-shopping process may look pretty similar to the first time you bought a home. You get pre-approved, connect with an agent, and tour some homes. Once you find one you like, that’s where things get new.

Qualifying for a home

Good news. Because you’ve already been building equity with your first home, qualifying for your second may be a lot easier. You’ll have the funds from the sale of your current home to put toward the new one, and more likely to have more available for down payment. For this reason, you won’t be able to use first-time homebuyer resources like down payment assistance programs, but you’re also less likely to need them. Of course, the first step to buying your home is the same as your first—getting pre-approved before you go home shopping.

Your loan advisor will work to get you pre-approved for the next house, with a declaration that you either will (or more commonly won’t) be carrying two mortgages at once. That’s where contingencies come in.

Putting in an offer without contingency

So, you got pre-approved and found a house with all the good vibes. Putting in an offer while you own a home is similar to your first home, with a twist. You’ll want to connect with your agent on price, seller concessions, inspections, and credits, but also on the contingency of selling your current home.

If you’re able to afford (and qualify for) the two mortgages at once, you’re in the clear. No contingencies will need to be marked on your offer. This means you have enough in the bank for a down payment without selling your current one. It also means your income is high enough and your debts are low enough to qualify for the two mortgage payments at once. Even if you plan on selling your current home, you’ll need to qualify for both mortgages if the first one won’t be sold by the time your second closes. But if this isn’t you, you’re in the majority.

With Lower, you can buy your next home with the  proceeds from your current home—before you sell it.

Putting in an offer with contingency

Selling your home then buying the next one is very common.

Nearly 40% of repeat homebuyers used funds from the sale of their home for their next down payment.

It just takes a little juggling to make it all work.

To go the traditional route, you’ll need to talk with your real estate agent about placing a contingency on your offer. That means if the sale of your home falls through, you won’t be held to the contract for the one you’re buying. It’s a great protection for you, but not great for sellers, and they may be more apt to accept an offer without contingencies. Plus, selling a home when you’re trying to buy one can get a bit hectic with preparing your home for sale, open houses, etc.

That’s different here at Lower. You can buy your next home with the cash proceeds from your current home—before you sell it. This means you can close on your new home, move in, then we sell your home for you. No needing to vacate your home for showings or be rushed by a quick deadline to move.

Questions about the Lower Buy-Before-You-Sell program?

‍Get connected to a mortgage expert at Lower.