'Buy before you sell' gets easier with more lender options
Knock has opened up its Home Swap program to allow any lender to participate.
Key points:
- For homeowners who want to buy a home before selling their old one, the fintech company offers equity-based down payment loans, and now allows buyers to also work with a local lender.
- The expansion of the program can benefit agents working with buyers who need to bridge that financial gap but want to choose their own mortgage provider.
- Knock also offers a home prep plan, providing sellers with up to $35K for improvements before listing their home.
In what looks like an uncertain market heading into spring, fintech company Knock is making it easier for buyers to purchase a new home before selling the one they are in.
Knock recently announced that it has expanded its Home Swap program to allow any lender to participate. Through the program, a buyer can put a down payment on a new home using an equity advance loan from Knock, while working with a lender of their choice to secure a conventional mortgage.
"By partnering with lenders, we are making it easier for consumers to get the benefits of leveraging the equity in their current house to buy their dream home without any of the hassles that typically come with buying and selling, including the ability to avoid moving twice and living through repairs and showings," said Knock Co-Founder and CEO Sean Black.
The expansion of the program can also benefit real estate agents who are trying to help clients juggle the sale of one home and purchase of another. Jason Korrell, a broker associate at Tri-County Associates in Denver's metro area, said he has many clients who are interested in Home Swap, but for one reason or another were tied to their current lender.
"With the recent changes, this opens up a lot of opportunity for these clients to take advantage of the home swap and to find their new home before worrying about selling their current home," Korrell said in an email, adding that it takes pressure off buyers who otherwise might be worried about timelines and getting their contingent offer accepted.
While recent declines in interest rates are raising expectations for more homebuying activity this spring, the market may remain cool with buyers looking for price cuts and sellers reluctant to give up ultra-low interest rates on their current home.
For buyers who are also selling, the uncertainty of timing those transactions is a major pain point, along with affordability, according to a company spokesperson.
Along with helping buyers secure a down payment on a new house, Knock offers a home prep plan that provides sellers with funds to fix up their house for a quicker sale, and the company will make a backup offer on the old house if it doesn't sell within six months.