In today’s competitive real estate market, many homeowners face a frustrating “chicken and egg” problem: you need the equity from your current home to buy the next one, but you can’t sell your current home until you know you have a place to go. Even worse, carrying two mortgages often pushes your Debt-to-Income (DTI) ratio too high to qualify for a new loan.
Enter the DTI Buster through the Flyhomes “Buy Before You Sell” program. This solution is designed to help you move on your own terms without the stress of home sale contingencies or restrictive debt ratios.
How the “DTI Buster” Works
The core of this program is a Guaranteed Backup Contract that Flyhomes places on your existing home. This contract acts as a financial safety net that allows mortgage underwriters to exclude your current mortgage from your debt ratio calculations.
Key Benefits for Homebuyers:
- Boost Your Buying Power: By excluding your current mortgage, you can qualify for 40-50% more for your next home.
- Remove Contingencies: Make your offer as strong as a cash buyer by removing the home sale contingency.
- Fast Approval: Approval is frictionless and can be ready in as little as 24 hours (or 3 hours in urgent situations).
- Move Once: Close on your new home and move in before you even list your old one.
Real-World Example: The “DTI Buster” in Action
To understand the impact, let’s look at a sample scenario for a family looking to upgrade.
The Situation:
- Current Home: Estimated value of $500,000 with a $2,200 monthly mortgage payment.
- Target Home: A new property listed at $750,000.
- The Problem: The bank denies their new loan because their Debt-to-Income ratio is too high while carrying both the $2,200 old mortgage and the projected $4,000 new mortgage. They also can’t get their offer accepted because the seller refuses to wait for them to sell their current house.
The DTI Buster Solution:
- Approval: The family receives a Guaranteed Backup Contract from Flyhomes.
- Lender Magic: Their lender sees the backup contract and excludes the $2,200 payment from their DTI calculation.
- The Win: Now qualifying for the higher amount, they submit a non-contingent offer on the $750,000 home. The seller accepts it over other contingent offers.
- The Move: They close on the new home and move in immediately.
- The Sale: They list their old home with their preferred agent. It sells for $510,000. They keep the extra $10,000 in profit (minus transaction costs). If it hadn’t sold within 180 days, Flyhomes would have purchased it at the guaranteed price.
The 4-Step Process
- Get Approved: Receive your Guaranteed Backup Contract within 24 hours.
- Win the Home: Make a competitive, non-contingent offer and move into your new place.
- List the Old Home: Market your old home at full value for up to 180 days.
- Finalize & Profit: Sell at market value and keep any net profits from the sale.