Building and selling a home in the same time frame can be stressful. You may find yourself juggling price negotiations, putting your realtor on speed dial, and pulling out your hair in anticipation. Although there are tools to predict the market value of your current home, securing a sale in a timely manner is never guaranteed. Thankfully, there are options available to those who are building a new home in Houston. The stress of gap time can be reduced, and you won’t even have to consider homelessness.
- Construction Loans
Most people aren’t able to pay for all the bells and whistles out-of-pocket. Construction loans can be used to finance the construction process of a new home without feeling the financial pressure. There are two primary types of construction loans: construction-only financing and construction-to-permanent financing. The first option typically requires payment at the end of the building process, while the second can transition into a standard mortgage payment. They typically last about 6-12 months, around the average building time for a home.
Other options include HELOC (home equity line of credit), in which the lender agrees to lend a certain amount in an agreement period, where the collateral is the equity in the home. Bridge loans, sometimes called gap financing, although becoming more uncommon, allow you to take out a short-term loan to cover the interval between building your new house and selling your old one.
- Rent out Current Home
If your lender permits you to keep your old home and build a new one, assuming you can handle both mortgage payments, you can rent out your home. This rental income could be used to reduce your debt-to-income ratio if you can show your lender a signed lease. In some cases, the renter will agree to pay more than what you owe on monthly mortgage payments.
If you’re grinding your teeth at the never-ending price drop of your home, renting may be a good option. Keeping the property until prime selling time can allow you to make more money in the end. This way, you won’t have to worry if your home is difficult to sell.
- Temporary Housing
With Hurricane Harvey in the rearview mirror, Houston is well-prepared to offer temporary housing. Whether it be a small apartment, corporate housing, or in a friends’ home, there are countless options to choose from. Storage units are available to those who don’t like the idea of endless packing and unpacking.
- Extended Stay Hotels
Thanks to 26 extended hotel chains in America and the many large company headquarters in Houston, there are a plethora of opportunities for this option. The average price for a studio rate is just under $40 a night, significantly cheaper than an average $165 per night for the standard hotel.
Whatever your decision may be, know that multi-tasking building and selling can be challenging and there are options to alleviate the stress of the unknown. Although the awkward transition time isn’t often ideal, the value of a brand-new home to call your own outweighs the temporary discomfort. Century Construction in Houston is well-equipped to help you answer questions, provide direction, and help you create the home of your dreams.