Problem :
Solution 1 :
Solution 2 :
Issues to consider :
Problem :
Conventional bank unwilling to lend enough money to purchase target house based upon not enough of a cash down payment and homeowner not qualified to carry two mortgages .
Solution 1 :
Sell current home and purchase desired house .
Solution 2 :
Borrow money from an alternative lending company willing to lend enough to purchase target house and cross collateralize on both houses
Does it Makes Sense to Buy a New House before Selling the Old One ?
Issues to consider :
* The potential hassle of having to move twice if current home is purchased and target house not closed simaltaneously .
* The costs of moving twice with moving expenses , rental of temporary housing , and storage of belongings .
* Losing on the target house due to delay in selling current house .
* In a rising real estate market , the incremental loss of the difference in appreciation of a more expensive target house .
* The costs of obtaining a private loan and carrying two houses until the old house sells .
* Tax benefit of carrying two houses versus selling house and renting until target house is purchased
* Months to get old house fixed up in order to maximize sale of old house .
* Private loan costs more upfront , but you lose appreciation while searching for a new home .
* If it takes a long time to sell the old house and search for a new home , this could add substantially to the costs .