Buy Before You Sell

Many homebuyers struggle to purchase a new home when they have yet to sell their existing home because their existing mortgage is consuming too much of their available household debt to get a pre-approval and/or their current home holds significant equity to use as a down payment for a new home. One possible solution is to use a sales contingency, which contractually allows a buyer to walk away from the purchase of a new home if their old home fails to sell before the close of their new house. Sellers are weary of accepting these types of offers because there is no guarantee a buyer’s current home will sell in time.

The Buy Before You Sell (BBYS) loan from Park 65 Lending is the perfect solution to the problem above. The BBYS program provides you a guaranteed backup offer on your current home, so that you don’t need a sales contingency when purchasing your new home. Furthermore, the program will allow you to borrower equity from your current home to make a down payment on your new home.

The Buy Before You Sell loan (BBYS) removes the sales contingency, making the purchase of your new home significantly easier.

Qualification Decisions:

Qualification for the BBYS program is contingent upon a few factors, mainly:

• Home Type: Most common residential structures will qualify, but all homes are subject to a review process ahead of time.

• Equity: This program requires a buyer to have at least 25-30% equity in their current home, meaning the mortgage value is 75% or less of the home’s value.

• HELOCs Ok: This program can be used even if the current home has a HELOC open.

• Credit Score: Credit scores above 620 are accepted.

Benefits of BBYS:

• No sales contingency - You are no longer dependent on your current home to sell to close on your new home.

• Larger pre-approval amounts — With your existing home removed from your mortgage qualification, you can purchase a more expensive house than you otherwise would be able to.

• Equity access — The BBYS program allows you to access your current home’s equity for down payment and closing costs.

• 0% interest on equity - The equity you use to purchase your new home is not subject to an interest rate.

• Competitive interest rates - The home loan we set up for you on your new purchase will still get our best interest rates.

• Higher sales price - By keeping your house in tip-top shape and not needing to sell ASAP, you generally command 3-10% more sale value for your home, according to our program’s sales data.

• No storage costs - You can avoid expensive storage fees by timing the move into your new home without needing your current home sold beforehand.

• Transparent Fees - The BBYS program has very few fees and is meant to be easy to understand.

The Park 65 Lending BBYS program gives you low cost, transparent access to your home’s equity while still having the opportunity to sell your current home for its maximum value.

FAQ:

1. How long do I have to sell my current home? You have 120 days from the purchase date of your new home to sell your existing home.

2. 120 days have elapsed and my current home hasn’t sold. Now what? In cases where you haven’t sold your home within 120 days of purchasing your home, you continue to pay your home’s expenses until it sells. However, the bank will take title to the property until it is finally sold to a buyer.

3. How is my new home loan set up? The mortgage on your new purchase is typically a conventional loan, but we have additional loan types that are possible depending on your situation.

4. Can I buy my new house with a VA loan? Unfortunately, the BBYS program does not support setting up a new VA loan.

5. What are the program fees? — Fees are dependent on the market value of your current home and whether or not you are taking equity from your home. Please contact a Park 65 Lending loan officer for the most up-to-date fee sheet.

Is Buy Before You Sell Right For You?

The BBYS program is perfect for any buyer who is looking to purchase a new home prior to selling their old home. There are certainly situations where the program may not be a good fit, so please contact a Park 65 Lending loan officer to learn more about how this program may or may not fit your needs.