Mortgage round-trip: Timing a home sale, home purchase

Given their druthers, most people would sell their old house and buy their new house on the same day. But it's not always possible to time the closing of the sale and the closing of the purchase within minutes of each other.

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"When moving in the same geographic area, nine times out of 10 you see the closing dates coincide with each other," says James Mason, director of sales for Internet lender MortgageIT. "Sellers and buyers usually coordinate with real estate agents so the dates do coincide and all parties are happy."

Sometimes, though, the dates don't coincide, despite everyone's best efforts. There are two types of poor timing, and ways to cope with both. First, a gap in ownership occurs when you have to sell your old house a few weeks or months before you buy your new one. Second, an overlap in ownership happens when you buy your new house before closing on the sale of the old one, forcing you to pay two mortgages for a while.

A gap in ownership is the simpler problem to deal with. You might confront an ownership gap for various reasons. Perhaps you have sold your house and moved across the country and want to familiarize yourself with your new home town before buying a house. Or maybe construction of your brand-new house has fallen behind schedule, past the closing date on the sale of your old house.

"The most common approach," says Dave Herpers, director of consumer affairs for mortgage lender Amerisave, "would be to rent back the property from the new owner." Typically, he says, your monthly payment would be the same as the new owner's mortgage payment.

Staying in the house and renting it from the new owner is the cheapest and most convenient way to deal with the ownership gap because you have to pack your stuff and move it only once, without having to pay to store it somewhere and move it twice.

A shrewd seller will anticipate the ownership gap problem and accept an offer from a seller who is flexible about the move-in date. Even if that offer is for a little less money, it might save money in the long run.

If you can't stay in your house while you rent it, you'll have to move in with friends or relatives, or rent a place for a while.

"You don't want to eat up your profit in moving costs -- meaning two moves -- and storage costs and interim rental or hotel costs," says Ellen Bitton, president of New York-based Park Avenue Mortgage.