Randy Forcier, CMG Home Loans
rforcier@cmghomeloans.com · Saco, ME

The Double Play Strategy

Buy your next home before you sell the one you're in. One move gets you into the new house, the second move happens when the old one sells. No contingent offer, no moving twice, no renting in between.

There are two ways to run it. The right one depends on your equity, your income, and how much payment you can carry for a few months.

1

The first play: Buy light, then recast

  1. Buy with a minimum down payment.Keep your cash in hand and carry both mortgages until your current home sells.
  2. List and sell your current home.Your sale proceeds come to you at closing.
  3. Recast the new mortgage.Put the proceeds toward principal. Your rate and term stay the same, and the payment resets to where you want it.

Recasts are generally available on conventional loans, not FHA, VA, or USDA. Minimum paydown amounts and fees vary by servicer.

2

The second play: Tap the equity first

  1. Open a home equity loan before you list.This has to come first. Most lenders won't lend against a home that's already on the market.
  2. Buy with a larger down payment.A smaller new mortgage and a lower payment from day one.
  3. Sell and pay it off.Your current mortgage and the equity loan are both paid off from the proceeds at closing.

Until the sale closes, you're carrying three payments: the current mortgage, the equity loan, and the new mortgage.

Run Your Numbers

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Estimates for illustration only, not a loan offer. New mortgage figures are principal and interest on a 30 year fixed loan. The equity loan is figured on a 20 year term. Total cost counts interest and fees during the months you own both homes. Your current mortgage payment is left out since it's the same under either play. Taxes, insurance, and mortgage insurance are not included. Actual rates, terms, and eligibility depend on your credit, income, and property.

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The Borrower

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The Current Home

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The Next Home

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The Notes

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Examples are for illustration only and are not a commitment to lend. All loans are subject to credit approval, underwriting guidelines, and property eligibility. Recast availability, fees, and minimums are set by the loan servicer.