Precautions when selling real estate and buying another real estate at the same time

Precautions when selling real estate and buying another real estate at the same time

If you can’t afford it, beware of “double loans”

Taking out a mortgage for relocation even though the current mortgage has not been paid is called a double loan (or double loan). It’s a very risky situation and I would like to avoid it if possible.

It would be ideal if you could sell your condominium first and then buy a new real estate to relocate, but you may find yourself in the ideal property before you sell it. In this case, it is no wonder that you want to buy new real estate before selling your condominium.

Also, even if you can sell the real estate first, there is a risk. If you can’t find the property you want to buy immediately after selling the condominium, you will have to temporarily live and you will inevitably spend extra money.

Even if you move with your family or rent a new rental property, it costs 1 million yen. It would be nice if there was an emergency house such as my parents’ house where I could live temporarily, but that doesn’t always work.

From the above, it is common to sell your own condominium on the premise of purchasing a new home. However, if you take another mortgage to buy a new home with your previous mortgage remaining, you have a double mortgage. When making a double loan, the repayment amount is said to be 30 to 35% of the annual income, but financial institutions attach great importance to this ratio, so if the combined repayment amount exceeds this ratio, borrowing will be done. It will be difficult.

Calculate how much your monthly payments, such as repayment amount and management fee, will be compared to your annual income. The lower your annual income, the smaller your monthly payments will be.

Replacement loans also have some risks, but they are less risky than double loans and are recommended. A replacement loan is a type of mortgage that sells the current condominium and uses it for the remaining debt of the mortgage, and if it cannot be repaid, it is added to the mortgage of the new property.

In the case of a double loan, there will be a period of literally double payment. In the case of a replacement loan, the remaining bonds are collected in the mortgage for the new house, so there is no double payment. You can also select the monthly repayment amount.

In the first place, mortgages are basically one per household, and if you buy a second-hand loan, the conditions may be stricter than when you build a new one. Therefore, depending on the financial institution, it may not be possible to make a double loan for a mortgage with a low interest rate.

Ideally, you should sell it before you buy it.

Even if you want to sell and buy real estate at the same time, there is a time lag between selling and buying. After all, the ideal flow is to sell your condominium and then buy the property you want.

If you sell your real estate first, the money you have will be clear. This makes it possible to see “how much of that amount can be used as a down payment and various expenses for purchasing new real estate” and “how much should I get a new mortgage loan”, so it is new at a realistic price.

If you can buy real estate at a realistic price, you won’t get an unreasonable mortgage and you won’t have to worry about paying. If you haven’t found the property you want to buy, consider selling your condominium at the best possible price.

To get the real estate you really want, you have to “buy first”

Ideally, you should be able to sell your condominium first, but if you find the property you really want first, you may end up buying new land before the sale is complete. In such a case, I would like to think about bridge loans. For example, a mortgage is generally a case where you get a new home and then get a loan, but there are various costs from considering a replacement to actually getting a new home. Bridge loans are effective for borrowing in such cases.

Bridge loans are often used when building custom-built homes, but some real estate agents offer bridge loans for replacement. In the case of replacement of a condominium, you may purchase a new condominium first when the property you want to sell has not been sold yet. In such a case, it will be available during the bridging period before borrowing a mortgage. Therefore, it is possible to set a sufficient period for selling activities.

By using such a service, it is possible to carry out sales activities with a margin without worrying about buying. Although it costs a bridge loan, if you really want to buy a new condominium before selling it, such a service provided by a real estate agent can also be considered.

Summary

Buying another property at the same time as selling one property is hopefully a cheap way to do it, but that’s not the case.

In such cases, giving priority to selling is a solid and secure way to proceed. You can focus on selling your home at a high price, so you can sell at a price closer to your wishes. In addition, since you can think about the price of the next house to buy based on the sale price, you will be able to simulate the funds reasonably and you will be able to make a mortgage loan steadily.

Even if you must purchase first, avoid double loans as much as possible, and consider using a replacement loan or a bridge loan service for replacement support provided by a real estate agent.

 

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