Back in the late 70's when I started in mortgages, it was fairly commonplace to have "domino" closings take place. That meaning multiple buying/selling transactions, each dependent upon an earlier one, successfully take place.
One initial Closing kick-started all subsequent Closings. Like the chain reaction seen in dominoes, each took place in a close time frame, one quickly following another.
The Sellers at one Closing became the Buyers at the next, and so on. This happened so frequently back then that I didn't think much of it. It was normal.
But the frequency with which this happened grew less and less. It came to a grinding halt during the downturn of the late-2000's housing crisis.
Understandably so. Closings, in general, were far fewer in number. Sellers became restrained in their ability (and also less willing) to tackle the financial risks associated with these tandem transactions.
Currently, many markets across the U.S. have improved. Although the healing has been slower, I'm once again receiving financing questions from Chicagoland homeowners that are confident enough in their abilities to sell, or at least sell within the timelines of their purchase contract, to want to enter into these types of scenarios.
If that describes you, and you're thinking you would like to sell your Chicagoland home at the same time you're buying another, be aware that many things must fall into place properly for you to do this successfully. The timing with which these things happen is important. Again, just like in dominoes.
So what are these "things"?
Below you'll find a list of critical factors that determine the success, outcome, and speed in which your transaction(s) are completed. Those factors are:
- Income sufficient to satisfy 2 Mortgage Payments
- Assets to satisfy Down Payment Costs and Closing Cost requirements WITHOUT selling your current home first
- Satisfactory Credit to accomplish new financing Approval
And last, probably what is the least remembered and most overlooked criteria ....
- Reserves. The money retained AFTER Closing must be sufficient to cover 2+ months of BOTH Mortgage Payments, inclusive of Taxes, Insurance(s), ALL items affecting or related to owning BOTH properties (current and new home)
ALL of the above factors are pre-requisites to financing Approval. So it's important that you, as a step-up Buyer, consult with a Lender (and an Agent) before assuming you can afford two mortgages ... or enacting a sale or purchase.
Although "contingent" offers are increasing in number once again within some housing markets, hopeful Seller/Buyer/Borrowers can't afford to assume anything in this situations. You can't assume you can handle the risks faced within these scenarios. Or the probability that your offer will be viewed positively by Sellers.
I've written before regarding the importance of good communication between all parties (client and professional) involved in a real estate transaction. It takes on heightened importance with the more challenging selling/buying scenarios, such as the one talked of above.
Simultaneous selling and buying of Chicagoland homes can be successfully accomplished. While elements of these scenarios are different and unique, one thing is shared by all. A hopeful Seller/Buyer/Borrower needs to get their "ducks in a row".
Obtaining a thorough, detailed analysis of your individual scenario ... including all the critical factors listed above ... well in advance of starting your selling/buying journey, is a critical step towards finding success.
Let's talk today to initiate your best options and get the ball rolling ...
Mortgage Originator - NMLS #216987
IL Lic. #031.0006220 - WI License #216987
Gene Mundt, Mortgage Originator, 40+ years of #mortgage experience, will offer you exemplary mortgage service and advice when seeking: #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including: The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of Chicago, #Cook County, and elsewhere within IL and Wisconsin.
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