Which first- apply for new mortgage or list our house for sale?
we are hoping to move to a new home this summer but my husband and I can’t agree on timing. He wants to have it on the market April 1st as that gives him over two months to get his credit scores looking good and to make minor improvements/repairs around the house. But he is assuming we would need to apply for a new mortgage immediately upon listing the house. I think that since the market is so slow we’d do better to hurry and get listed (say by March 1st) and then start the mortgage approval process once we’ve had a few showings. I don’t know if there is a standard sequence for these things- this is the first house we’ve owned so I’ve never been through the process of buying AND selling. I would appreciate any advice at all! Thanks.
I should add that we started the approval process with one lender a few months back but didn’t follow through because he found out our credit union has better rates. They also have pretty high expectations for credit scores. Their minimum score is in reach- essentially paying off our credit cards (just did yesterday) will push us over but it can take up to two months for the reporting agencies to update that on credit reports. I also know most lenders want to see your last two bank statements so this is why my husband is pushing for a two-month wait before we list. So we have a pretty good idea of the amount and rate we’ll qualify for (though I do know things are getting worse by the day with the housing slump and subprime mess). Don’t have any idea if this info changes anything but thought I should add it just in case!
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March 25th, 2010 at 2:25 pm
First find out how much you CAN get approved for.
Then put your house up for sale. Once sold, you can find a house within your limits and do the whole thing at one time.
March 28th, 2010 at 4:33 pm
if you have not sold what you have yet where do you anticipate getting the money down for the new mortgage ?
March 29th, 2010 at 8:36 am
One of the conditions first put in writing. Subject to the sale of yours. Is the new home you are buying going to cost more? if so always talk to your lending institution first. They will advise you.
April 1st, 2010 at 1:12 am
i’ve never owned or sold a home but your way sounds MUCH better–i would think listing it sooner than later would be okay because, like u say, the market is bad—i don’t see why he can’t work on his credit in the meanwhile, and depending on the improvements/repair he’s got in mind, sometimes those can just be negotiated into a better selling price to entice a potential buyer (some people just LOVE fixer-uppers)–maybe the buyowner.com website has some info??
April 3rd, 2010 at 12:03 am
ALWAYS apply for the mortgage first. The mortgage guidelines have changed so much that you need to have at least a 650 or higher score to get a somewhat decent rate.
Then you need to know if your budget can afford the new rate.
See if you qualify to get your next mortgage first. I have actually heard of a couple who sold their house first then did not qualify for their next mortgage….You do NOT want to put yourself in that situation.
Get your mortgage squared away first, this will dictate what you need to do next.
(Blogdog is a Licensed Mortgage Broker and Licensed Realtor in the state of Florida.)