Do you have to sell your current home before buying your next one? Recent qualification changes — and the equity you’ve already built — could give you more options for what happens next.
Maybe your current home no longer fits the way it once did. You need more space. Less space. A different commute. A different neighborhood. Or maybe you’ve simply found another home that feels like the right next move.
For many homeowners, that leads to what seems like an obvious next step: sell the current home, then buy the next one.
But what if you don’t want to sell?
Maybe you have an existing mortgage you’d rather hold onto. Maybe your home could make sense as a rental. Maybe you like the idea of turning a property you already own into a longer-term investment.
That raises a different question:
Can I keep my current home as a rental and still qualify to buy another home?
For some homeowners, the answer may be yes. And recent changes to qualification guidelines have made that conversation especially worth having now.
One of the challenges with keeping your current home has traditionally been showing how its future rental income fits into qualification for the next mortgage.
That has changed.
Under recently updated guidelines, homeowners in eligible situations may be able to use potential market rent from the home they’re leaving to help offset its monthly payment when qualifying for a new primary residence — without first having a tenant or signed lease in place.
That’s a meaningful difference.
You may be able to explore whether keeping your home works before you’ve already committed to renting it.
There are still qualification requirements, and expected rent isn’t simply counted dollar-for-dollar as additional income. Your individual circumstances matter. But you no longer necessarily have to assume that keeping your current home means finding a tenant before you can move forward with the next one.
For a homeowner who has wondered, Could I turn this home into my first rental instead of selling it? that can open up a very different conversation.
You’re certainly not the only one asking.
Recent housing-market data shows more homeowners are looking at properties they might once have automatically sold and considering whether renting them could make more sense instead.
There are plenty of reasons why.
You may have built substantial equity. Your existing mortgage may be attractive enough that you’re reluctant to give it up. Your neighborhood may have strong rental demand. Or keeping the property may fit into a longer-term goal of owning real estate beyond your primary residence.
The home you’re leaving may not simply be something you need to sell to get to the next one.
It may be an asset worth evaluating before you decide.
Those are two different questions.
The mortgage conversation can help determine whether keeping your current home while purchasing another one is financially possible. But qualifying to keep it doesn’t automatically mean turning it into a rental is the right choice for you.
There are other responsibilities to consider, including the existing mortgage payment, taxes and insurance, maintenance, potential vacancies and the responsibilities that come with owning a rental property.
Your available equity matters, too. Keeping the home means keeping that equity invested in the property — while selling may make it available for what comes next.
Being able to keep your current home doesn’t automatically mean you should. But knowing you may have the option gives you the opportunity to make that decision before you move forward.
Here’s where the conversation gets even more interesting.
Maybe you look at your options and decide:
Nope. I want to sell.
That still doesn’t necessarily mean you have to sell first.
If you’ve built equity in your current home, that equity may give you another way to make your next move.
First Savings Mortgage’s Portfolio Bridge Acquisition Loan can help qualified homeowners use the equity in their current home to purchase their next home before the current home is listed or sold.
Eligible homeowners may finance up to 100% of the new purchase price, allowing them to make a non-contingent offer that can compete more like cash.
And that can change more than the financing.
It can change the order of the entire move.
Buy before you list. Move before you sell. Then sell on your timeline.
Instead of trying to coordinate a purchase and sale at exactly the same time, you may have the flexibility to secure the next home, move into it, and then prepare your current home for sale.
For some homeowners, that may mean fewer moving pieces at once. For others, it may mean having time to make repairs, paint, stage or simply get everything out before putting the home on the market.
Most importantly, you don’t have to let the timing of your purchase automatically force the timing of your sale.
There isn’t one answer that works for every homeowner.
You might keep your current home and turn it into a rental.
You might use the equity you’ve built to purchase your next home before selling.
Or selling first may still make the most sense for you.
The important part is understanding those possibilities before you make a decision that takes one of them off the table.
Your existing mortgage matters. Your equity matters. Potential rental income matters. So do your available cash, your next-home plans and your longer-term financial goals.
That’s why this conversation is worth having earlier than you might think.
If you’re starting to think about your next move, you don’t need to have the current home figured out first.
A First Savings Mortgage Loan Officer can help you look at the home you own, the equity you’ve built, its potential rental income and what you want to do next — then explore the financing options that may help you get there.
Before you decide what happens to your current home, find out what it could make possible.
For qualified clients. Financing is subject to credit, income, asset, property and program eligibility requirements. Portfolio Bridge financing requires sufficient equity in the departing residence. Rental income used for qualification is subject to applicable documentation and calculation requirements. Restrictions apply. Please contact a Loan Officer for more information.
