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Question about monies received from selling a house

Let's say someone wants to buy a house and sell their current house.

 If we buy a house before we sell our current house--do they consider the money from your 'going to sell soon house' as part of a down payment? Or is it not even considered b/c the house hasn't sold yet?

  • March 21 2011 - Chattanooga
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Answers (4)

Profile picture for wetdawgs
If your current house is on the market, and you have a firm contract that is about to close, you will have better luck with the money being considered than if you are just thinking about putting your house on the market.

If your current house is not on the market, you will have to have a substantial down payment on the second home and have income to support both mortgages. 
  • March 21 2011
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Equity from pending sale can be used for down payment.   You can apply for a concurrent closing and have the proceeds go directly from the sale of current house into escrow for the new purchase.

Of course, you need to actually complete the sale of your current house prior to closing on the new purchase, and you should make sure to put in your purchase contract an escape clause if you are unable to sell your current home.
  • March 21 2011
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Profile picture for Chris Corica
b) Not even considered because the house hasn't sold yet.
  • March 21 2011
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They will consider it to a point.  Meaning, you will need to have it sold before they will fund your loan on the new property.  Otherwise, they will want to know where you received your funds to purchase the new property.  If you used a lower downpayment, then you will need to qualify for both mortgages.  Make sure to keep your Final HUD-1 (Closing Statement), as the underwriter will want to verify the proof of funds from the sale of the property and verify the prior home has been sold.
  • March 21 2011
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