How to Move if Your House Hasn’t Sold Yet in Georgia

How to Move if Your House Hasn't Sold Yet found a house but need to sell can't sell my house but need move Atlanta Sandy Springs Roswell Johns Creek Alpharetta Marietta Smyrna Dunwoody Peachtree Corners Kennesaw Lawrenceville Duluth Suwanee Stone Mountain GA GeorgiaSo you’ve found your dream home. There’s just one problem: You haven’t been able to sell your house yet. So what do you do? In this article, we hope to help you figure out how to move if your house hasn’t sold yet in Georgia.

Moving can be tough when you are trying to buy and sell a home all at once. The FHA, Fanny Mae, and Freddie Mac all have rules about getting a second mortgage while you still own your home. If you want to secure an additional mortgage, you will have to clear a few hurdles.

How to Move if Your House Hasn’t Sold Yet in Georgia

First off, to qualify for a second mortgage through the FHA, you must meet certain qualifications.

If you’re trying to figure out what are the requirements for a second mortgage while you are in the FHA ‘one year’ time frame, you need to have a good reason for needing to move right away, and not after your current house has sold. For example, moving because your family needs a larger space, you are separating from your spouse, or for work purposes.

Also, you cannot owe more than 75% of the value of the first home. There are additional restrictions as well, do your homework before assuming you will qualify for an additional loan through the FHA.

“A Borrower may be eligible to obtain another FHA-insured Mortgage without being required to sell an existing Property covered by an FHA-insured Mortgage if the Borrower is:

  • relocating or has relocated for an employment-related reason; and establishing or has established a new Principal Residence in an area more than 100 miles from the Borrower’s current Principal Residence.
  • If the Borrower moves back to the original area, the Borrower is not required to live in the original house and may obtain a new FHA-insured Mortgage on a new Principal Residence, provided the relocation meets the two requirements above.”

Other exceptions, including for situations where the borrower has an increase in family size, may also be possible.

“A Borrower may be eligible for another house with an FHA- insured Mortgage if the Borrower provides satisfactory evidence that:

  • the Borrower has had an increase in legal dependents and the Property now fails to meet family needs; and
  • the Loan-to-Value (LTV) ratio on the current Principal Residence is equal to or less than 75% or is paid down to that amount, based on the outstanding Mortgage balance and a current residential appraisal.”

Asking family can be another route, so long as you put everything in writing.

Agree to pay them back in full upon the sale of your first house. Whenever you borrow money from family, you want clear terms to be set and adhered to.

If you think a family relationship could be damaged because of money, you might want to look for a different way to secure the financing you need.

Life is full of surprises, and any loan can go bad. Of course, everybody has good intentions, and these deals often seem like a great idea when they first come to mind. But pause long enough to consider the following issues before you get too deep into something that will be difficult to unwind.

Relationships: Existing relationships between the borrower and seller may change. Especially if things get difficult for the borrower, borrowers may feel extra stress and guilt. Lenders also face complications — they may need to decide whether to sternly enforce agreements or take a loss.

Lender risk tolerance: The idea may be to make a loan (with the expectation of getting repaid), but surprises happen. Evaluate the lender’s ability to take risk (becoming unable to retire, risk of bankruptcy, etc.) before moving forward. This is especially important if others are dependent on the lender (dependent children or spouses, for example).

Property value: Real estate is expensive. Fluctuations in value can amount to tens (or hundreds) of thousands of dollars. Lenders need to be comfortable with the property condition and location — especially with all of those eggs in one basket.

Maintenance: It takes time, money, and attention to maintain property. Even with a good inspector, issues come up. Lenders need to be sure that the resident or owner will address problems before they get out of hand and be able to pay for maintenance.

Title issues and order of payments: The lender should insist on securing the loan with a lien (see below). In case the borrower adds any additional mortgages (or somebody puts a lien on the house), you’ll want to be sure that the lender gets paid first. However, you’ll also want to check for any issues before buying the property. Traditional mortgage lenders insist on a title search, and the borrower or lender should ensure that the property has a clear title. Title insurance provides extra protection, and would be a wise purchase.

Tax complications: Tax laws are tricky, and moving large sums of money around can create problems. Before you do anything, speak with a local tax advisor so that you’re not caught by surprise.

A bridge loan or as it’s sometimes called, a “wrap” loan can help “bridge the gap while you attempt to cover two house payments.

These types of loans will take both mortgage payments, and combine them into one interest-only payment. These are typically short-term loans, lasting 6 months to one year.

Lenders have different requirements, but you must typically have great credit and be financing less than 80% of the value of both houses.

Rates will vary among lenders and interest rates can fluctuate, but we’ll use 8.5 percent for this example. This type of bridge loan will carry no payments for the first four months but interest will accrue and will come due when the loan is paid upon sale of the property.

Here are some sample fees. They might be more or less depending on your location.

  • Administration fee: $850
  • Appraisal fee: $475
  • Escrow fee: $450
  • Title policy fee: $450+
  • Notary fee: $40
  • Recording fee: $65
  • Wire/courier/drawing fee: $75

In addition, there’s typically a loan origination fee on bridge loans based on the amount of the loan. Each point is equal to 1 percent of the loan amount.

Generally, a home equity loan is less expensive than a bridge loan, but bridge loans offer more benefits for some borrowers. In addition, many lenders won’t lend on a home equity loan if the home is on the market.

While it may not be your first choice, you can talk to your boss or plan administrator about borrowing from your 401k. 

Make sure you understand how the tax penalties will work, and pay yourself back after the sale of the original home. This may not be an option for everyone, but definitely, something to look into.

Try to offer the seller of the second home, the option to rent it back from you for a few months. 

Depending on their situation, they might love the idea of being able to stay in their home while they shop for a new one. If you are attempting to carry two mortgages, this is a great way to alleviate the cost.

Add in a contingency in your offer allowing you to close on the new home, only after your home has sold.

If your home is new to the market and priced well, it should sell right away. Present this to the owners of the second home, along with your offer. Ensure them that the closing won’t be delayed and that you agree to close in a certain amount of time

Whether you are looking to buy or sell, we can help you with all of your Real Estate needs! Fill out this short form, or give our office a call today! (770) 744-0724

 

Get More Info On Options To Sell Your Home...

Selling a property in today's market can be confusing. Connect with us or submit your info below and we'll help guide you through your options.

What Do You Have To Lose? Get Started Now...

We buy houses in ANY CONDITION in Georgia. There are no commissions or fees and no obligation whatsoever. Start below by giving us a bit of information about your property or call (770) 744-0724...
  • This field is for validation purposes and should be left unchanged.