Selling and Buying at the Same Time? How Many Mortgages Can You Have at Once? Find Out Here

Matt Norton
February 12, 2019

The average mortgage payment in America is $1,030, but how many mortgages can you have? Can you have more than one mortgage at a time? Is that what double mortgages are?

Buying a house is complicated enough, but now you're selling and buying all at once. What are the best practices in this situation? Continue reading this article to find out how to best deal with mortgages when you find yourself in this situation.

How Many Mortgages Can You Have?

You may not be sure why your home isn't selling, but if you're ready to get out - you may be willing to carry more than one mortgage. Is this possible?

The short answer to this question is - yes, no and maybe. It all depends on your situation.

Pull Your Credit Report Before You Apply

The more prepared you are before you submit your loan application, the better it will be for your case. Not only that, if you notice that your credit score is not looking healthy, you can analyze it and see if there is anything you can do before you submit.

If you have high balances on your credit cards, if you pay them down, so you have 30% utilization or below over your credit cards, this can give you a big boost. If your credit cards are maxed, you look like a high-risk borrower even if you have money in your savings accounts.

Look through your credit report to see if there is anything false or any mistakes. If an account is listed as past due and you know you're up to date, make sure to query to the credit bureau and get it fixed before you go to apply for your double mortgages.

Fixing these things before you go to apply will allow you to expedite the process and keep your loan application from raising any unwanted red flags to the lender.

If you are filing a joint application, make sure to pull their credit as well as go through the same process.

Example of a Borrower Who Can Take on Two Mortgages

You have Tom and Sally. They've been living in their small home for about 3 years, and it has been the perfect home. The only problem is they've found out twins will be arriving soon, and they need more space.

They don't want to sell their home, move into an apartment and then find their dream home. That's too much moving with mom doing enough carrying at this point with twins.

Tom and Sally go to their bank to see if they can qualify for their loan. Both Sally and Tom are working, and the bank finds that their debt-to-income ratio is 35% even after adding another estimated mortgage. Most lenders do not want to lend to people that have a debt-to-income debt of more than 43%.

As we can see, Tom and Sally are well beneath the 43%, and they get the green light on new financing even while paying their current mortgage.

What to Do If You're Not Qualified to Take on Two Mortgages

Many times, people don't have the income of Tom and Sally. Their debt-to-income ratio may be at 55% if they take on two mortgages and the bank is not willing to risk it.

Even if they have a good credit score and they've been on time with all of their payment, this does not matter as much as the borrower's debt-to-income ratio.

If you don't want to sell your home before buying a house, there is another option. With this option you can make a contingency offer on a home you want to buy. Contingency offers don't work well in a strong real estate market and here why.

If you are in a strong real estate market, you can still try to make contingency offers, but many homes will sell too quickly. When you make a contingency offer on a home, you set a date with the buyer of when you expect to sell your house. If you sell your house by that date, then you get to buy the home you want.

In a perfect world, you get the home. In some cases, the world isn't so perfect. There is a clause in the contingency document you signed, and it says that the seller is able to market to other home buyers and accept their offers.

What Is the Best Option?

There is no perfect option, and depending on what works for you, any of these scenarios might seem like a good fit. The only thing you can do is what you can do, to put it bluntly.

If you don't qualify for a double mortgage, you may have to take some time renting while your home sells. This is a situation may not be ideal, but if your home doesn't sell soon enough, then you may have to do it.

There may be a case where you can sell your home and exit to your new home quickly. If you have enough money to put an attractive offer in on another home when your home sells, you may be able to work a decent move time out with your buyers.

Always be open to negotiation and see how you can work around other people's schedules but don't be afraid to make an ask as well. You never know if your buyers will be willing to wait to move in unless you ask.

Don't Worry About Double Mortgages

Now you have the answer to your question of, "How many mortgages can you have?" but why carry two mortgages if you don't have to?

Right. That makes sense. Why didn't I think of that?

I can almost hear the frustration in your thoughts. We've got good news for you. We sell homes for free.

If you want to move your house without having to worry about fees and other hassles, we can help. Contact us today to get started and keep from paying for two mortgages.

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