Buying a New House and Concerned About Getting a Loan if My Existing House Doesn't Sell

We put a deposit down on a new home build, and I’m worried about what will happen if our existing home doesn’t sell by the time the new home is built. Here are the numbers:

  • New home: $800K

  • Deposit paid: $160K

  • Due at closing: $640K

  • Existing home for sale: $1.325M (Agent suggested a $1.4M listing price)

  • Mortgage remaining: $350K

Debt:

  • Only the existing mortgage: $3,500/month

Income: $210K

Cash on hand: $200K

Retirement account value: $750K

Credit score: 840

I have three credit cards with $125K available, all paid in full every month. The house hasn’t hit the MLS yet, but it may sell immediately when it does. I told my agent I would accept any offer over $1.2M. My intent is to sell the old house and show up with cash at closing on Feb 28th. But if the home doesn’t sell, what will I do? Will a bank write me a new mortgage while I still have the old one? Do I have enough assets to qualify for a $640K loan? Should I apply for a $500K loan and put down an additional $150K from my cash on hand? I plan to pay off the new mortgage as soon as the old house sells, but should I mention that when applying? I can drop the price of the old house to $1M and still pay off both loans.

When should I apply for the loan if the house hasn’t sold? Thoughts? Things to be concerned about? Things NOT to do?

You should definitely talk to your loan officer now. They can tell you if you’ll be approved for both mortgages given your current financial situation.

With your strong credit score and income, you should be in a good position. Lenders will look at your overall financial health, including your current debt and assets.

Many lenders will allow you to carry both mortgages temporarily. Just be clear about your situation and intentions when applying.

Consider applying for the loan sooner rather than later. It gives you time to address any issues that might arise during the approval process.

It might be wise to apply for a lower loan amount initially, especially if you’re not certain about the sale of your existing home. Having cash on hand can be a strong negotiating tool.

Keep in mind that each lender has different policies regarding temporary double mortgages. Make sure to shop around and get the best advice.

I’d recommend being honest with the lender about your plan to pay off the new mortgage quickly. They’ll appreciate your transparency.

If your house is priced well, it should sell quickly. Don’t panic if it doesn’t sell immediately; just stay proactive and keep communication open with your agent.

Having significant cash reserves is a huge advantage. You’re in a good spot to negotiate and make offers, so don’t stress too much!

Make sure your home is well-prepared for the market when it hits the MLS. Good presentations can lead to quicker sales.