How people end up here
Almost nobody sets out to carry two mortgages. It happens in four ways and they are all ordinary:
- You bought first because the house you wanted appeared before yours sold
- The job start date was fixed by somebody else and the sale was not
- Your buyer fell through in week seven, and the clock restarted rather than paused. Our page on a sale that fell through covers that specifically
- You inherited a house with a mortgage on it while still paying your own. Different cause, identical arithmetic
The common feature is that the second payment started on a known date and the first one was supposed to stop on a date nobody controlled.
What it actually costs a month
People count the mortgage payment and stop. The real figure is bigger, and working it out properly is what makes the decision obvious. On the house you are trying to sell:
- Principal and interest, plus escrowed tax and insurance
- Insurance at the right rate. If the house is now empty, tell your insurer and read what the policy says about an unoccupied property, because cover written for an owner occupier may not be cover any more. Our page on selling a vacant house covers that
- Utilities, kept on for showings and for heat in winter
- Lawn and basic upkeep, which is now a paid service, and which also keeps you out of a code file
- Somebody to check on it, if you have moved away
- Trips back, which people never count and always make
Then the items that do not arrive monthly but arrive:
- Price reductions, which are the largest holding cost of all and dwarf several months of everything above
- A repair while it sits, because the water heater does not know the house is for sale
- A second buyer, and the whole cycle paid for twice
Put real figures into our holding cost calculator rather than estimating. The number is usually about double what people guess, and it is the number that should drive the decision.
The four ways out
1. Keep waiting, with a date. Legitimate if the house is financeable, in reasonable condition and priced properly, and if you can carry it. What makes this work is deciding now, in writing, at what date you switch to something else. Deciding that in month four, under pressure, is how people make the expensive choice.
2. Reprice it properly, once. A series of small reductions is the most expensive way to discover a price. If the house has sat with viewings and no offers, the market has told you something and a single meaningful move beats three timid ones.
3. Let it out. Converts a cost into an income, and converts you into a landlord in a city you may no longer live in. Our page on the rental sell or keep calculator is where to put real figures, and our page on selling a rental property covers what happens when you want out later, including that a tenant in place narrows your buyer pool.
4. Sell it for cash and end it. A lower headline number against a known date, with the carrying cost stopped. Whether that nets more than waiting depends entirely on how many more months the wait would be, which is the calculation in the next section.
Bridge finance, honestly
A bridge loan is short term borrowing secured against one or both properties, intended to cover the gap until the first house sells. It exists, people use it, and it is worth understanding before anybody offers you one.
What to establish from a lender, because none of it is something a website can tell you:
- The rate, the fees and the total cost over a realistic timeline rather than an optimistic one
- The term, and precisely what happens if the house has not sold when it ends
- What security is taken, and over which property
- Whether there is a prepayment penalty if the house sells quickly
- What you have to qualify on, given that you are carrying two mortgages already
The honest risk: a bridge converts a cash flow problem into a dated debt. If the house sells, it worked. If it does not sell within the term, you now have a deadline as well as two mortgages, and the options at that point are worse than the ones you have today. Bridge finance suits a house that is genuinely sellable and temporarily unsold. It does not fix a house that is not selling for a reason.
How to decide, with numbers
- Work out the true monthly carry on the unsold house, all of it
- Ask the agent how long their last three listings took, in your price band and condition, from listing to closing. Not the area average
- Multiply, then add one more cycle for the possibility that a buyer falls through
- Get one written cash offer as a floor. It is free and it gives you a second column
- Compare the bottom lines in our net proceeds calculator: the listed price minus commission, closing costs, likely credits and all those months, against the cash offer with the carry stopped now
Sellers who do this honestly are often surprised in both directions. A house that will sell in six weeks should be listed, and we will say so. A house that has already sat for three months while you pay for two is usually telling you something the price alone will not fix.
The short version
Carrying two mortgages costs far more than the second payment, once insurance on an empty house, utilities, upkeep, trips back and the eventual price reduction are counted. There are four ways out and the right one depends on how many more months the wait realistically is.
Work out the true monthly carry, get a realistic timeline from the agent, get one written cash offer as a floor, and compare the bottom lines. Decide the switch date now rather than in month four.
Frequently asked questions
What does carrying two mortgages actually cost?
Far more than the second payment. Add insurance at the correct rate for an unoccupied house, utilities, lawn and upkeep, somebody to check on it, trips back, and then the price reduction that usually follows. It is commonly about double what people estimate.
Does my insurance still cover the empty house?
Tell your insurer it is unoccupied and read what the policy says, because cover written for an owner occupier may be limited or excluded once the house is empty. Get the position in writing.
Should I reduce the price or wait?
A series of small reductions is the most expensive way to discover a price. If the house has had viewings and no offers, one meaningful move beats three timid ones.
Is renting it out a good idea?
It converts a cost into an income and converts you into a landlord, possibly in a city you no longer live in. Run real figures including vacancy, turnover and a maintenance allowance before deciding, and remember a tenant in place narrows your buyer pool later.
What is a bridge loan?
Short term borrowing secured against one or both properties to cover the gap until the first house sells. The terms vary by lender, so get the rate, fees, term, security, prepayment position and qualifying requirements from a lender rather than from an article.
What is the risk with a bridge loan?
It converts a cash flow problem into a dated debt. If the house sells within the term it worked. If it does not, you have a deadline as well as two mortgages, and the options then are worse than the ones you have now.
How many months should I assume the sale will take?
Ask the agent how long their last three listings took in your price band and condition, from listing to closing, rather than using the area average. Then add one more cycle in case a buyer falls through.
My buyer fell through and now I am paying for both. What first?
Get the termination and the earnest money sorted in writing, get the inspection report if you can, and work out which of the four reasons it actually failed, because that decides whether relisting will work.
Would a cash sale net me less?
On the headline, almost always. On the net, it depends entirely on how many more months of carrying cost and how many more price reductions the alternative involves. Put both columns side by side rather than comparing the two top numbers.
I inherited a house with a mortgage while paying my own. Same thing?
Different cause, identical arithmetic, with the extra step that somebody needs authority to sell for the estate before anything can close. Start that immediately, because it runs in parallel rather than afterwards.
What is the single most useful thing to do today?
Decide, in writing, the date at which you will switch to plan B. Deciding it now is a choice. Deciding it in month four is a reaction.
Will you tell me if waiting is the better option?
Yes. If the house is financeable, insurable and in reasonable condition and the realistic timeline is short, waiting or relisting usually nets more, and we say so on every page of this site.
We buy houses, so read the last option knowing that, and note that this article says plainly when waiting or listing is better. We are not lenders or financial advisers. Bridge finance terms, rates and qualifying rules are lender specific and nothing here is a quote or a recommendation.
Before you deal with anybody, our page on how to tell Tulsa cash buyers apart covers the four kinds of buyer operating here and the questions that separate them.