Home Equity

Qualifying For a Mortgage Before Selling Your House With a Sale-Leaseback

By Tom Burchnell
mortgage sale-leaseback

If you’ve only just started thinking about buying a new home, one of your first concerns is probably the house you’re living in right now.

You want to sell your old house, but where will you live until you move into your new place? For that matter, how long will it take to sell your current house? And how do you even go about qualifying for a mortgage before selling your house?

The process can feel overwhelming, but there’s an easy solution that helps to solve all these problems at the same time. It’s called sale-leaseback.

Introducing the Sale-Leaseback Option 

Your home is probably your most valuable asset. But in its current state, it won’t help you qualify for a mortgage on a second home.

A sale-leaseback, or simply a leaseback, is a kind of sale where you transfer ownership of your current home under an agreement that lets you continue living there as a tenant. This is often a win-win situation for both buyers and sellers alike.

By selling your house, you can quickly access cash. People need this cash for many reasons, including:

  • Paying off old or emergency debts.
  • Helping with a second mortgage.
  • Investing in a new business.
  • Selling their home and continuing to stay there while searching for a new place.

By providing quick cash while letting you stay in your former home until you’re ready to move, sale-leasebacks are a smart strategy to take the stress out of moving. It’s a fast way to put money in your pocket and qualify for that new mortgage, shop for a whole new house, and make plans for moving day without ever having to leave your current place.

At EasyKnock, we offer both long-term and short-term options:

  • Our Sell & Stay program lets you sell your home and rent it back for as long as you’d like with the ability to buy back ownership of the house at a predetermined price, or to move and collect any appreciation on the home value.
  • With the MoveAbility program, you sell your home and stay put as a renter for up to 12 months as you find and get ready to move into a new home.

EasyKnock does not require a minimum credit score or traditional income qualifications. When you sell your home to us, part of the sale will go toward paying off your existing mortgage or other debts. EasyKnock’s able to close in less time than traditional sales, providing you with the money for your new mortgage quickly. 

If you’re looking to qualify for a second mortgage without worrying about your old home, the MoveAbility program is an ideal solution for you.

EasyKnock’s MoveAbility Program

When you choose a sale-leaseback option with EasyKnock, we pay off the current mortgage of your house. That way, you can get to work immediately on making an offer — or even a down-payment — on the property of your choice without the hassle of moving out until you’re comfortable and ready. 

MoveAbility gives you financial freedom and removes the pressure of having to move out right away. Sell and then stay in your home as a renter for up to a year while searching for and preparing to move into a new one. Your leaseback agreement will determine:

  • Your monthly rental payments.
  • The duration of your leaseback arrangement.
  • How payments will be made for insurance and utilities related to your old house.
  • An Option contract exclusive to MoveAbility that gives you the power to instruct EasyKnock to sell the house on the market, terminating your lease, at any time within 12 months of signing.

When you are ready — that is, when you’ve found a new home and made all your arrangements — we will work with you and your real estate agent to put your old house on the market.

Tips on Getting Started

At EasyKnock, we work hard to make selling your house before buying a new one as easy as possible. The basic steps to this process are:

  1. You submit your information online.
  2. We schedule an initial phone call with you to learn more about your circumstances.
  3. We’ll make an initial offer based on the information you provide. 
  4. We’ll conduct a due diligence inspection of the home and a background check. 
  5. We’ll use the gathered information to make an appraisal of the market value of the home. 
  6. A title company licensed by your state will sign and notarize all of the documents necessary to complete your sale. 
  7. The sale will be complete and the funds transferred to you. 

There are a few important things for you to consider about your sale-leaseback agreement. 

  • You can choose between short- or long-term leaseback agreements for your home with different degrees of complexity, depending on your needs. Note that the average time it takes to sell a house once it’s on the market is between 65 and 93 days
  • When negotiating the price of your property, consider your home’s appraisal value. You will need a professional, third-party assessment of your home’s market value to help you negotiate. 
  • Keep track of which party is responsible for what. For instance, sale-leaseback agreements generally have tenants pay for electricity, water, and other utilities. Leasebacks also commonly prevent tenants from making home modifications without asking for permission first — which won’t feel familiar when staying in a home you used to own!
  • After selling your home, you’ll be its first renter, and so you will need to include rental insurance as part of your agreement. EasyKnock will cover any Homeowners Association fee, homeowners insurance, and property tax ourselves. 

EasyKnock’s MoveAbility program is designed to help you qualify for a mortgage before moving out of your current home. It’s an ideal way to free yourself of a mortgage while converting your home equity to cash to afford your new home. You can achieve financial flexibility while you scout for your dream home without worrying about where you’ll sleep at night in the meantime.

At EasyKnock, our MoveAbility leaseback program is carefully put together to help you unleash the value of your home according to your own timeline and needs. We specialize in sale-leaseback programs across all 50 states.

Key Takeaways

Visit our website today to learn more about how we can help you and see whether our Sell & Stay or MoveAbility programs are right for you.

Tom Burchnell
Tom Burchnell Director of Product Marketing

This article is published for educational and informational purposes only. This article is not offered as advice and should not be relied on as such. This content is based on research and/or other relevant articles and contains trusted sources, but does not express the concerns of EasyKnock. Our goal at EasyKnock is to provide readers with up-to-date and objective resources on real estate and mortgage-related topics. Our content is written by experienced contributors in the finance and real-estate space and all articles undergo an in-depth review process. EasyKnock is not a debt collector, a collection agency, nor a credit counseling service company.