Use Home Swap to Buy and Sell a House at the Same Time
It can be tough to buy or sell a home at the same time. But there are solutions, like Home Swap. It’s a bridge-like loan program that makes it easier to make the transition.
Home Swap is a company that helps you buy and sell your home. You can use their financial tools to get a head start on buying your dream home. They also offer advances of up to $25,000 for pre-sale home improvements. Here are some things you need to know about Home Swap, including some common questions people have about
What is Knock Home Swap?
Home Swap is a loan program that helps people buy a new home without having to sell their old home first. It is similar to a traditional bridge loan, which is a short-term loan that people use in the lead up to getting long-term financing. Homeowners don’t have to sell their home before they buy a new one. They can close on their new home and then go through the process of selling. That way, they don’t have to worry about juggling two mortgages or trying to minimize the time between closings.
How does Knock Home Swap work?
The Home Swap program works like this:
- If you want to buy a new home with Knock, the company that does Home Swap, you first need to get pre-approved for a loan. This loan is secured by paying 1.25% of the new home’s purchase price. The loan also includes an advance for your down payment. (You can either pay the 1.25% when you close or roll it into what you borrow.)
- When they find the home they want to buy, the purchasers put in their offer right away. That means they do not have to sell their previous home first. Once they move in, they will start making payments on their new mortgage while Knock Equity Advance covers payments on their old mortgage for up to six months.
- The homeowners will list their old home for sale while they are settling into their new home. If they need to make any improvements before the sale, they can take out a loan for up to $25,000.
- Homeowners can use a real estate agent to sell their old home. If the home does not sell within six months, the homeowner has the option to sell their home directly to Knock for a set price. This price is usually around 80% to 85% of what the home would be worth if it were sold on the open market.
With Knock, you sell your home loan to us after you close. You will make your mortgage payments to us. The payment for the Home Swap loan is a 1.25% convenience fee.
What are the benefits of using Home Swap?
The biggest benefit of a bridge loan is that homeowners do not have to sell their current home before buying their new one. This is a huge advantage because most people cannot afford to pay two mortgages at the same time.You are still paying for your first mortgage with Home Swap. But you don’t have to worry about cutting two checks every month. You are also moving before listing your first home, so you don’t need to find a way to juggle everyday living with open houses and showings.
Another big benefit is that buyers can avoid a sale contingency. This means that they won’t have to close the deal on your home if their old one doesn’t sell. This makes it easier for both the buyer and the seller. The seller might find the buyer’s offer more attractive because of this. The offer from Knock largely functions like cash because Knock guarantees that the loan will be funded on closing day.
Home Swap vs. traditional lending
Once you close on your new home and your loan is sold, it will be just like a traditional mortgage. The only difference between a Home Swap and a standard mortgage is what happens before you close. Plus, Knock Home Swap will provide services to help you sell your old home.
Keep in mind that with convenience comes a fee. With Home Swap, you might get more for your money, but you will have to pay a 1.25% convenience fee. This might be more than the origination fee you would have secured on a traditional loan.
What’s the same?
If you use Home Swap, you’ll still have to pay all the normal closing costs, including title-related fees, attorney fees, and lending fees. The only difference is that you’ll also have to pay a 1.25% convenience fee. However, you can choose to roll this fee into your mortgage instead of paying it at closing.
Your rates for a home loan will depend on your qualifications. The better your credit and the less risky you are, the better terms you will get on your loan. This is true whether you use Home Swap or another lender.
Flexible housing options
You can use Home Swap to buy and sell different types of housing, like condos, townhomes, and new construction. This will not stop you from getting a loan to buy a home.
If you qualify for a Home Swap loan and your qualifying information doesn’t change, you will get cash-backed financing that is not dependent on whether your other home sells. This gives the seller 100% assurance that the loan will go through on closing day, no matter what.
If you want to have a no-sale contingency in your traditional mortgage, it is possible, but it will be risky for the lender. You’ll need to have the cash to support this option yourself. You can use home equity loans, bridge loans, or savings to do this, but they will be separate from your new mortgage.
You can get a traditional mortgage in any state, but Home Swap is only available in some states. As of January 2022, the program operates in select metropolitan areas in 15 states: Arizona, California, Colorado, Florida, Georgia, Illinois, Maryland, Michigan, Minnesota, North Carolina, Oregon, South Carolina, Tennessee, Texas and Washington. Visit Home Swap’s Cities page for a complete list of locations.
Closing date guarantee
If you need to move quickly, Home Swap can help. They guarantee that you’ll be able to close on your purchase within 30 days. If it takes longer than that, they will give you $5,000.
If you need some extra money to improve your home before selling, you can use Home Swap’s Home Prep service to get up to $25,000 for your projects. You can choose the contractors you want to work with and Knock will handle the payments. With a traditional home loan, you’ll have to find another way to finance the improvements, such as a home equity loan, personal loan, or credit cards.
Knock Home Swap reviews
Is Knock Home Swap a real program? Yes, it is a real program that homebuyers can use to buy and sell homes at the same time. It can also be used by first-time buyers who want to purchase a home.
Knock has good reviews, and they have a B+ rating through the Better Business Bureau. We were glad to see that the company responds to complaints, though not all of them are solved yet. You can also view Knock Home Swap reviews on Trustpilot, though their rating there is lower, with seven reviews averaging 3.3 stars out of 5.
Other options for buying and selling a house at the same time
There are different ways to finance a move if you’re looking to buy and sell at the same time. Home Swap is one option, but it’s not the only one. Here are some of the other options that are available to you.
Home Equity Line of Credit (HELOC)
A HELOC is a loan that allows homeowners to borrow money against the value of their home. The longer you have lived in your home, the more equity you will have in it and the more money you will be able to borrow with a HELOC.
HELOCs are a lot like credit cards in that you have a limit on how much you can borrow. You can borrow money when you need it. To buy a new home, you can borrow as much of the limit as you need and then use that money to buy the home.
Keep in mind that you will have to pay back your HELOC in full before you sell your home. This shouldn’t be a problem as long as you can sell your home for at least as much as the current value of your mortgage.
Home Swap is an example of a short-term loan. This loan can help you “bridge” the time between when you buy a new home and sell your old one. A standard bridge loan might not have the same benefits as Home Swap, but it could still be a good choice for you depending on your circumstances.
A bridge loan is similar to a HELOC in that you borrow against the equity in your house. Unlike a HELOC, however, you won’t have an extended repayment period if your home doesn’t sell right away. Bridge loan repayments usually begin after 12 months, at which point you’ll be responsible for paying back the loan as well as the mortgage on your new home unless you were unable to sell it.
A bridge loan can be helpful because it gives you some flexibility and the ability to make a higher down payment. However, there are drawbacks, including the short repayment period and high interest rates. You will also have to pay additional closing costs.
An Instant Buyer, or iBuyer, is a company that buys your home quickly and then tries to sell it for more. This is a new type of company and service. It has faced a bit of controversy. OOne big-name iBuyer closed up shop after consumer complaints they were driving up prices on purpose. The company itself says they shut down the program because of inaccurate price forecasting and too much inventory.
Some people think that iBuyers are a good idea, but others don’t. iBuyers are companies that will buy your house from you. They will charge you 5% of the sale price of your home and they will also deduct the cost of any necessary pre-sale repairs from your net proceeds. They are not available in all markets yet, so check to see if they are in your area.
Turn your home into a rental
Another option when buying a home is to rent out your current home. This will give you extra money to pay your mortgage. If home prices are down, it is a good time to do this. You can wait until the market goes up again so you can sell for more money.
There is a downside to renting out your home when you are buying a new one. You will not have any cash to use for the new home. You will have to use your savings and get a new mortgage. You will also have two mortgages at the same time. This might be hard to manage if you do not have enough money.
Should you use Home Swap or another option to buy and sell?
There are many things to consider when buying and selling a home at the same time. Your personal finances and the real estate market in your area are two important factors to think about. There are many things to think about when buying a new home. You will need to figure out how you will pay for it and what kind of home you want. You can find the right option for you if you work with a financial planner and a qualified real estate agent. With some research, you should be able to buy your dream home without having to sell your current home first or worry about finding short-term housing.