Mortgage, Savings & Investment, Smart Spending

Financing Between Buying a New House and Selling the Old One

When you own a house and you wish to move to a new home, you have a logistical challenge to deal with. You need to try to time your move so that you can sell your old house and then be able to move right into your new space. Unfortunately, timing the transactions in this way is difficult or even impossible. Most people will need to find a new house and then put their house up for sale after they have already decided where they intend to live next.

When you are making the transition from one house to another, this means that you need to explore how you are going to finance the new home while still owning and paying for the old one.

How to Finance a New Home While Still Selling Your Old House

When it comes time to finance a new home purchase, banks are going to be concerned about the fact that you still have your old home. This is going to be a problem when it comes time to finance because banks are going to be afraid of what will happen if you cannot sell the old space right away. This should also be a concern for you as well, since you don’t want to end up trying to carry two mortgages as you pay for your new house while you wait for your old one to sell.

Banks will sometimes be willing to lend you money to buy a new house while you still own the old one, but usually only if you can show that you have sufficient income to carry both houses for as long as you need to until the old house is finally sold. If you can do this, then it gives you more flexibility to secure traditional financing on your new space.

If you don’t have the money to carry both houses and a bank won’t give you a traditional loan, you will need to think about other potential options that are available to you. For example, some choices might include:

  • Taking a home equity loan on your existing house. If you can get money out of your old house to pay for your new one, this can make sense. You can pay off the old home equity loan when you sell your house by getting a mortgage on the new space at that time.
  • Taking a bridge loan. A bridge loan is a short-term loan that is specifically designed to allow you to buy a new house while still carrying the old one for a short period of time. Bridge loans can be more expensive than a home equity loan but can allow you flexibility in your new home purchase, especially if you do not have a lot of equity in your old home that you could use to put down on your new property.


By considering these different options, you should be able to make the transition. Speaking to a mortgage broker or to your local bank will give you more ideas about the different options available to you for financing when transitioning from one house to another.