[USER]

We want to move locally this year and expect that it will take much longer to find a house we want to buy (due to our many specific requirements) than it will be to sell our current home (great location, one-level home).

With two kids and multiple pets, we can’t easily rent in between. So, I’m trying to figure out how to purchase before selling.

Instead of a HELOC or home equity loan for the down payment for the new home, I’m thinking we should find a lender who will allow us to recast our mortgage after our current home sells.

We could put down 10% on the new home and would pay PMI until we sell our current house.

Once we sell, we’d put down an additional 30% or so and recast to reduce our monthly payments. Does this sound like the best option?

My spouse and I both have credit scores of over 800, have a combined high income for our area ($171K annually), low debt (only our current mortgage, $900/mo) and live in a LCOL area.

Current home is worth $367K and we expect to net about $215K on the sale. We expect to buy a house around $475K. We have about $60K in liquid assets.

And – while we can put 10% down and pay 2 mortgages for 3+ months (between buying the new house and selling our current one), that will be little tight for our cash flow. Our main “expense” is our retirement savings.

I’m considering cutting that back for 3 months to help us save up some cash for this cash-flow home buying issue.

Once we sell our current house, I’d make up for the usual monthly contributions so at year-end it would be the same. Is that a bad idea? I know time in the market is important. Thanks!

PS I considered renting our current home (interest rate is around 4.3%) but I’m not sure I want to be a landlord, and that means we’d have to pay PMI for a lot longer on the new home.

[Stef]

I did this, I worked from home, had two kids and five cats, and moved three hours away. But I was able to put 20 percent down, and it wasn’t too burdensome to still pay the other mortgage.

It was too much to consider showing my home while living and working there with kids and pets.

It worked out well for me.

[Erica]

I did this once and it was the most stressful experience of my entire life. No kidding.

I would never do it again.

[Lori]

I would get your house decluttered, have listing photos taken, have your agent get the listing ready to go live, and then . . . wait.

Wait to list until you find your next house, and set your close dates so you don’t own both.

Unless you could very comfortably own both, I wouldn’t sell before finding the next home.

If you’re confident your home will easily sell, I see no reason to list it before you find your next house.

[Jule]

So many people get stock paying two mortgages for longer than the anticipate. Please don’t.

Wait until your house is sold and then buy.

[Christina]

We did the same with a move but without a mortgage. It was stressful to not be able to sell and not knowing what to do with the first house that we didn’t want to rent out but not living in anymore.

I cannot imagine doing that with mortgages.

I’d sell first home before buying second if I were in your situation.

[Rebecca]

We did this when we purchased our current home; much much less stressful way to move.

We had the 20% down payment, but as long as you can cover both mortgages indefinitely (even if you had to cut back or eliminate long terms savings)-I would say do it.

Adding also please make sure you know what is required to remove the PMI-I have never had it.

[Author]

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