Thread: Did you know that you can exchange your home for a new one? Mortgage paid!

Yes, it is possible to swap when you owe more than the home is worth. You would have to satisfy the negative loan balance.

• Contact the lender for a possible approval of the short sale. When you have a contract where the other party is willing to purchase your home at the appraised value the bank may be willing to negotiate. Have the bank order an appraisal through their pre-qualified appraiser. Short sale process through some lenders is now quicker than before.
• OR Satisfy the negative balance by paying it off at closing either with cash or by borrowing against another asset.

The concept works as follows:

"I'll buy your house, but only if you buy mine".

It can also be viewed as two separate transactions taking place at the same time where party A buys a house from party B, while party B buys the house from party A. The exchange takes place on the same date via a simultaneous closing. Both parties pay off any existing loans and obtain new financing on the home they are buying. The only complication is to complete the closing for both parties on the same date.

• No more double mortgage payments because owners pay off the mortgage on their existing home and obtain a new mortgage on the new home - all on the same day closing.
• Swapping homes also reduces moving hassles as it eliminates the need for storage of belongings while in the search of a place to live in. The concept works as simple as "I will buy your house if you buy mine" so owners simply move to their new homes after closing.
• No more dealing with renters when you have a home on the market that is not selling, while you already purchased your new home.
• No more trying to find a short term rental to live in while looking for a new home. Short term leases are expensive, and breaking a lease is costly, but all of these hassles are avoided when trading houses permanently.

Equity is the value of a property after deduction of loans against it. Zero down payment loans from banks are vanishing as quickly as they appeared, so the only alternative way to obtain a no-down payment loan is by creating a second mortgage or by tapping into equity of another property. In conclusion, even property owners with no equity can swap as long as they are able to qualify for a new mortgage.

A owns the $250,000 house and part B owns the $350,000 mansion. In the first leg of the the swap above the title company receives $250K for the purchase of the $250K from party B (see below where this money really comes from), it then pays off $200K loan and applies the remaining $50K (party A's equity) towards the purchase of the $350K house on behalf of party A.

Since party A is upsizing, a larger $300K loan is needed to settle for the remaining difference. Since party B is downsizing to a smaller $250K house a loan for $200K amount is obtained while the equity of $50K is applied for the difference.

Since closing takes place on the same day equity positions flow seamlessly from one house to the other and appear on the closing statements.

Neither party needs to write checks for the equity positions.

This is perhaps the ultimate scenario and was brought up to me as an example by an experienced swapper and I'm sure this can occur in real life.

Well, even this one can be done, although with some difficulties. Again, let's look at this example as two separate transactions.

We provide the platform for traders to be matched and communicate with each other. The actual closings are handled by title companies, agents, and attorneys. We are actively trying to involve real estate agents in the process and recently introduced Metros, in which a real estate professional can specialize in house swapping and represent an entire metropolitan area.

The parties would still get together for one big closing, so nobody is left carrying two mortgages.

Frequently asked questions about real estates exchange, RV, yacht, business and other trading.

Topics cover: benefits of permanent house trading, how to swap properties,and how to close exchange transactions.

Included are articles, videos, guides, and interactive asset exchange decision makers.