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My husband and I currently own a home in CT and if we sold it, we would like to sell it for $ 200,000 (we currently have a 30 yr. fixed mortgage with a balance of about $ 152,000). We would be relocating to MO where homes are much cheaper, and lets say we purchase a home for $ 145,000. Would we be able to take the sale price of our CT home and apply it to the MO home and not take out a mortgage? Or are you only entitled to the equity amount that your home is worth after selling, being that we are mortgaging $ 152k? Also, when purchasing your 2nd home do you need to go and secure a new mortgage with a different interest rate or can you keep your current mortgage and change the terms?

3 Thoughts on Buying a 2nd home and mortgage question?
  1. Reply
    Ghost of Zeuz
    February 8, 2014 at 4:49 am

    Each transaction must be completed separately. You sell the house in CT. You pay off that mortgage. At closing you receive your sale proceeds less any other fees (i.e., approximately $ 40,000 in this case.)

    Then, you go to MO. You use the $ 40,000 as a downpayment and obtain a new mortgage.

  2. Reply
    Kevin
    February 8, 2014 at 5:05 am

    You are only entitled to the equity after payoff on your loan which will be presented to you at closing. You will need to apply for and secure a new mortgage for the house in Missouri and the mortgage terms and rates will change based on your current credit history and payment status of your current mortgage

  3. Reply
    lightupthesky25
    February 8, 2014 at 5:24 am

    One loan secures one home. You cannot transfer your existing mortgage to a new home (which is basically what you’re asking). You will have to sell the home in CT. Once you receive the check for your profit in the sale ($ 48K minus any closing costs associated with your side of the transaction), you can then use that as a down payment for a home in MO. But you’ll have to apply for a new mortgage, and you most likely will not get the same interest rate or terms.

    However, now is a great time to get a new mortgage as interest rates are generally low if you have good credit.

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