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The Curious Bag
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<h4 class="dechead">On One Hand: Obtaining Financing
In order to buy a house, you must have enough cash available for the down payment and be able to qualify for a mortgage for the remaining amount. If your income doesn't qualify you for both mortgages at the same time, you may not be able to obtain financing for your new house until you have sold the previous one.
On the Other: Income Property
You may decide to keep your previous house as a rental property while moving into the next one. In this case, you can declare the rental income as part of your income for qualifying for a mortgage on your second house.
Bottom Line
Unless both homes are substantially cheaper than you can afford, or you intend to keep your first house as income property, you usually need to sell your first house before buying the second. Note that you can put an offer on a new house that is contingent upon the sale of your old house.
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