Author Topic: How to quit job/buy new home/sell old home/move out of state  (Read 3863 times)

BTTG

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How to quit job/buy new home/sell old home/move out of state
« on: December 11, 2014, 09:13:50 AM »
I currently work full time and own a home in Pennsylvania (mortgage paid off: home value 290K) . My goal is to stop working at the end of June (no more paycheck and no more employee health benefit) and relocate my family (me, wife, and 4 and 6 year old children) to New England at this time. This process will involve downsizing (my goal is to buy a 200-225K home) and me not working in any capacity for at least the summer of 2015 and minimally thereafter.

Are there ways that I could buy my new home (New  England) ahead of time (month or two if I find something we really like… market is low volume where we are going so we feel we need some flexibility if we find something in the Spring) and not have to originate a mortgage? Currently, I have cash to pay 20% down on the new home, but not buy outright without liquidating assets. after selling my present home, which as said we own outright (290K) do not plan on carrying a mortgage on the new one (i.e., if I had to get a mortgage to buy the new home I would pay it off as soon as our current house was sold).

It seems very inefficient (i.e., a waste of money) to have to originate a mortgage when we do not plan on needing the mortgage long-term. Didn’t know if there were any way we could use the equity we have in our current home to bridge the 2 sales at a reduced cost to us? I assume getting a mortgage on the new home (i.e., would be viewed as a second home) while I am still working and earning a good salary would not be an issue.

I realize I could just sell/buy simultaneously, but feel that this would be VERY stressful at such a dynamic period of life (stopping work, moving out of state, dealing with lowing employee health insurance, 2 young kids and wife, etc…). Not having to time everything perfectly would on paper significantly reduce the stress of all these events.

Any ideas/advice? As we will be dealing with health insurance at the same time and the interstate move we see this setting up as being a stressful time and want to minimize that as things always seem to get worse than planned.

Thanks in advance for insight/direction.
 

MKinVA

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Re: How to quit job/buy new home/sell old home/move out of state
« Reply #1 on: December 11, 2014, 05:25:38 PM »
It's actually called a bridge loan. You put down the down payment and the the remaining mortgage is like a second on your current house but with a higher interest rate than a HELOC. It also normally involves a particular payoff date in the future.

BPA

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Re: How to quit job/buy new home/sell old home/move out of state
« Reply #2 on: January 21, 2015, 05:26:37 AM »
Bookmarking for answers.  My plan is to just sell my current place and then buy which can be more stressful, but I'm hoping an all-cash deal and perhaps renting in the interim might help me snap up a good place at a really good price.  I'm looking to optimize the financial aspect of the selling and buying, but understand where you are coming from.

And to the spammer:  Did you misunderstand the OP's question or was that the most blatant excuse for spamming I've seen in a long time? 

ETA:  Thanks mods for pulling the spam!
« Last Edit: January 21, 2015, 03:48:58 PM by BPA »

BTTG

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Re: How to quit job/buy new home/sell old home/move out of state
« Reply #3 on: January 21, 2015, 05:40:49 AM »
Thanks BPA.

Unfortunately where we are going the rental market is near zero. I am getting closer to the point of having to pull the trigger so will be meeting with my local bank in the next week or so to look into Bridge, loans, HELOC, other options for my situation...

I would love to sell, then buy with cash, but with an interstate move, going to a low volume market, and dealing with storing all our stuff the stress builds quickly! So just want to minimize the money i will have to waste to provide some peace of mind.

thanks again

BPA

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Re: How to quit job/buy new home/sell old home/move out of state
« Reply #4 on: January 21, 2015, 06:00:56 AM »
Thanks BPA.

Unfortunately where we are going the rental market is near zero. I am getting closer to the point of having to pull the trigger so will be meeting with my local bank in the next week or so to look into Bridge, loans, HELOC, other options for my situation...

I would love to sell, then buy with cash, but with an interstate move, going to a low volume market, and dealing with storing all our stuff the stress builds quickly! So just want to minimize the money i will have to waste to provide some peace of mind.

thanks again

Good luck!  Our experiences are different (rental market is good where I plan to move).  Let us know how it all goes. 

ZiziPB

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Re: How to quit job/buy new home/sell old home/move out of state
« Reply #5 on: January 21, 2015, 09:25:07 AM »
A HELOC on the existing house seems like a good option if you can get sufficient proceeds out of it to fund the remaining 80% of the purchase price that you need.  Then you would simply pay it off when you sell your current house.  That seems like the best option to obtain some liquidity without selling assets.  I am assuming that the closing costs for a HELOC would be lower than getting a standard mortgage on your existing house.

ZiziPB

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Re: How to quit job/buy new home/sell old home/move out of state
« Reply #6 on: January 21, 2015, 09:55:29 AM »
Another thought: how about a 401k loan?  These usually have minimal origination costs and become due and payable when you quit your job - so that may be a good option if you time it right.

Goldielocks

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Re: How to quit job/buy new home/sell old home/move out of state
« Reply #7 on: January 21, 2015, 10:10:00 AM »
One year open mortgage , no origination or points, no penalty to pay off, is the most common way around here. People get them while trying to sell current home, after their fixed term expires, or if they have a lump of money to pay it off coming soon. Very common

Right now they are costing 1.5% more apr than a 5 yr closed. Per posted rate at a big bank.

I would ask a big bank about a similar product for you. Else you may find the HELOC the best solution.