Learn how to buy a home before selling with cash, loans, or other options.
Buying a new home before selling your existing one can feel overwhelming, but several options can simplify the process. Many buyers face the challenge of upgrading to a new home while wondering how to manage the timing and financing. Understanding the available routes can help make this transition smoother.
The easiest route. The simplest way to buy a new home before selling your current one is if you have enough cash for a down payment while still owning your existing home. You’ll also need the income to qualify for both the new mortgage and your current home’s mortgage, along with any other debts, such as car loans or credit card payments. If you meet these criteria, this approach is the most straightforward. Essentially, you would buy the new home first and then list your current home for sale shortly after.
"When considering a bridge loan or other financing options, the first step is to consult with a lender."
Recasting your mortgage. Another option, which gained popularity during the pandemic, involves using the equity in your current home to reduce the payments on your new home. Once you’ve purchased the new property, you can apply the equity from your existing home to your new mortgage and recast it. This reduces the monthly payment based on the equity you’ve built, making your payments more manageable. This strategy worked well for many buyers during the pandemic, allowing them to buy a new home before selling their old one and then sell afterward to pay the mortgage.
Exploring bridge loans. If you don’t have the cash or equity needed to purchase your new home, a bridge loan might be an option. Bridge loans are short-term loans that allow you to put 20% down on a new home while waiting for your current home to sell. Once the old home is sold, you can refinance the bridge loan into a traditional mortgage. Bridge loans can be especially helpful when mortgage rates are higher, as they allow you to buy a new home even if you don’t have the income to qualify for both mortgages simultaneously.
How to get started. When considering a bridge loan or other financing options, the first step is to consult with a lender. Building a borrower profile based on your income and assets will help determine the best strategy for your situation. If a bridge loan isn’t right for you, alternatives such as using retirement savings or a home equity line of credit may also be viable, depending on your timeline. The process of exploring these options usually takes 24 to 48 hours, ensuring a quick and efficient decision-making process.
With the real estate market expected to see more move-up activity in 2025, it’s crucial to be prepared for increased competition. Whether you’re planning to buy before selling or need assistance navigating the market, we’re here to guide you through the process.
If you have any questions or need help, feel free to reach out to us. We’re ready to provide the expert guidance you need:
• Jon DeHart: (703) 286-9771 | [email protected]
• John Pyne: (703) 855-5158
Taking the right steps early can ensure a smooth move-up process, even in a competitive market. We look forward to helping you make your next move!
