Easley, SC · Member since 2014 · 2 posts · 0 votes
My sister is selling her home in one state and moving to another. She has a contract to sell and closing is May 29. Let's assume it will close without pblms.
She wants to try to find a new home and close on it ahead of moving out on May 29. Let's assume that's not only feasible but also smart! (Yeah, right...her bro says...)
Let's assume she will buy for an amount she can cover completely with the proceeds of the sell.
What I'm trying to help her understand is: how can she finance the buy before she cashes out of the sell?
All I can think of is for her to arrange a conventional mtge on the buy and then almost immediately pay it off completely with the proceeds she nets from the sell, even tho that'd mean she'd only hold the "buy" mtge for a few days or weeks.
Do I understand the situation correctly? Are there other options?
Your sister's income and assets will have to be large enough to support two mortgages if she goes the traditional route. Can they? When all the fees are added up a conventional mortgage may end up being extremely expensive money if it is only needed for a few days. Some traditional lenders may not be interested in the transaction if they know it is going to be for a very short time.
A hard money lender may be more willing to give more credit for the sale which will close in a few days. The ideal lender may be one who does transactional funding. Those types of lenders are looking for very short term deals. The APR will be higher for these loans but the total cost may actually be considerably less than a traditional mortgage.