Many people in the market for a new home want to know, should they sell their current home before buying another. The answer depends, of course, on how much uncertainty you can tolerate. If you are fairly certain that your current home will sell quickly, and you can afford to avail yourself of other accommodations, if necessary, then selling before buying may be a good idea. There are a few different options you should consider before moving forward.
You’ll want to know whether or not you can afford to hold on to two properties at once. If you can afford to do this, you may choose to move forward with a 20% down paymentwhich would allow you to avoid the usual CMHC fees that are added onto down payments that are less than 20% of the total cost of a new home.
If you choose to opt for a mortgage, you will be able to afford to raise the amount you can put down as an initial payment. This could make holding two properties for a short time more affordable, and give you more flexibility during your transition.
You may also consider making an offer on your new home under a conditional stipulation which states that you may back out of purchasing the new home if your current home does not sell. This “subject to sell” option is a standard clause in most real estate markets. Only the most demanding markets exclude this option.
Whatever route you choose, Midland Mortgage can help you understand how each will work with your unique circumstances. Get in touch today to learn more, and schedule an appointment.