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The Loan Store Lets Home Buyers Leverage Equity For Down Payment

David Krechevsky
Apr 26, 2023

Partnership with HomeLight allows home buyers to buy before they sell.

The Loan Store (TLS), a national wholesale mortgage company based in Tucson, Ariz., on Tuesday announced a new Buy Before You Sell product that allows borrowers to use the equity in their current home toward a down payment on a new home. 

The product, which The Loan Store is making available to its mortgage broker and non-delegated correspondent partners through a partnership with HomeLight, improves a homebuyer’s ability to secure their desired home quickly and confidently — without the contingency of selling their existing home first, the company said.

“We’re pushing wholesale loan originators even more to the forefront with this Buy Before You Sell product, giving them a tool that makes it much easier for homebuyers to secure the home they want in this hypercompetitive purchase market,” said Brandon Stein, president of The Loan Store. “The TLS Buy Before You Sell product eliminates contingencies and enables borrowers to use the equity in their current home as a down payment on their new home, allowing them to move faster and hold on to more of their cash in the process.”

Under the program, a home buyer receives an assessment on their existing home, and upon approval receives a guaranteed offer price from HomeLight. The home buyer then shops for a new home, using either a traditional pre-approval or an all-cash offer approval. They can submit competitive offers that are not contingent on the sale of their existing home, and can start the process before their existing home is even listed, The Loan Store said.

When an offer is accepted and the buyer goes under contract on a new home, they can then close with the ability to tap into the equity of their existing home for the down payment.

The buyer can then sell their existing home, listing it within 10 days of the closing on their new home, and receive full proceeds from the sale. If the old home does not go under contract within 90 days of the closing on the new home, HomeLight will purchase it at the guaranteed offer price, The Loan Store said.

“With the program agreement and a cash offer from HomeLight, the buyer can remove the pending sale contingency directly on contract and offset the departing residence liability,” the company said.”The buyer is also not responsible for factoring their current payment into their DTI (debt-to-income ratio) on the purchase underwrite.”

The Buy Before You Sell product will initially be available in seven states — Arizona, California, Colorado, Florida, Georgia, Oregon, Texas, and Washington — before expanding to other locations, the company said.

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