Key Information Processors & Loan Officers Need to Know
Buy Before You Sell affects the incoming residence's mortgage in two ways — assets and liabilities.
Assets
The final Buy Before You Sell Agreement will show the amount being wired to the title company (available Equity Unlock + 2nd lien payoffs)
The Equity Unlock loan note is used for proof of funds on the incoming residence's mortgage
The Loan Terms document is used in place of the Closing Disclosure, if needed
Liabilities
Buy Before You Sell facilitates a fully executed purchase contract with no contingencies. It removes the current mortgage debt from the incoming residence's mortgage DTI.
How to set up the Equity Unlock loan in your LOS
1. Set up the Equity Unlock loan as you would a bridge loan
The sale date is the incoming residence's closing date
3. Exclude the mortgage payment debt
When prompted to indicate why its being excluded, select 'Pending Sale'
FAQs
What if an underwriter requests the Closing Disclosure for the sale of the departing residence?
HomeLight cannot provide the final Settlement Statement/Closing Disclosure for the departing residence sale until closer to the end of the 90- day selling period
The Settlement Statement/Closing Disclosure is not needed per FNMA/FHLMC agency guidelines
Where will the Equity Unlock funds be sent?
Your client's funds will be sent directly to the incoming residence's title
When will the Buy Before You Sell documents be available?
Residential Purchase Agreement & Final Buy Before You Sell Agreement
After the departing residence inspection & final approval
Equity Unlock loan note
After the departing residence inspection, final approval, Equity Unlock loan closes, and the notary sends the documents back to HomeLight
What does the incoming residence's title need to know?
The Equity Unlock funds need to be wired directly to them
The overage must be disbursed back to the borrower
