A home equity loan is a loan in which the borrower uses the equity in their home as collateral. Still, if you have a lot of equity built up in your current house, and especially if you are trading down, buying with a home equity loan or line of credit might be a viable option.
Do you need to sell your home to buy a new one? If you live in an area where rent is relatively high compared to sales prices, and you can make it work financially, perhaps you can arrange to rent your house? Renting your house as a vacation home, entering into a rent-to-own scenario , or renting your house the traditional way are all options.
If you want to play it safe, you can always sell your home before buying a new one. But selling your home before buying a new one is not without danger. You might not find a house you like after yours sells — or, if the market is extremely hot, you might not be able to snag a new home right away because all the homes you like get scooped up before you can make an offer. As the seller, you can ask the buyer for a longer closing period, which will give you more time to find a new place to live.
First, apply for the program. If you have equity in your property, you can apply for a home equity loan or a bridge loan. Alternately, you might be able to borrow against your k , if your plan allows for loans.
Carl Carabelli has been writing in various capacities for more than 15 years. He has utilized his creative writing skills to enhance his other ventures such as financial analysis, copywriting and contributing various articles and opinion pieces.
Carabelli earned a bachelor's degree in communications from Seton Hall and has worked in banking, notably commercial lending, since Buy a New Car. By Carl Carabelli. If you buy in an area with a good long-term outlook, you may be able to profit when it comes time to sell.
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