Originally published March 20, 2023 – Updated January 2026. Market conditions and lending programs change frequently – this article reflects current strategies.
Buying a new home before selling your current one is a very common goal. The primary motivation is simple: avoid the disruption, stress, and added cost of moving twice.
Even in a more balanced market, sellers still favor non-contingent offers. A contingent offer (one that depends on the sale of your current home) can place you at a disadvantage, especially in competitive price ranges and communities. Fortunately, there are several proven financing strategies that allow you to buy first and sell later — and the right option depends on your equity, cash reserves, and qualification profile.
Below are the most effective approaches available today.
If You Have Enough Cash for the Down Payment and Qualify with Both Payments
This is the simplest scenario.
You purchase your new home, move in, and sell your current home at your preferred pace. After your sale closes, you may choose to:
- Recast your mortgage (apply sale proceeds to reduce your payment without changing your rate), or
- Refinance if market conditions make sense.
If You Need Your Equity for the Down Payment
Your options depend on whether you qualify carrying both mortgage payments:
If You Do Qualify With Both Payments
- Home Equity Line of Credit (HELOC)
Open a HELOC before shopping and use it for your down payment.
- Allows you to make non-contingent offers
- Cost typically ranges from $0–$4,000
- Some lenders charge a modest early-closure fee if you sell soon after, but it is typically just a couple to few hundred dollars, so quite nominal in the scheme of what you are trying to accomplish
- Cross-Collateralization Loan
This option allows up to 100% combined financing by securing one loan across both your current home and your new home.
- No contingency required
- Single loan in first position on both properties
- After your current home sells, the loan is automatically recast
- Typical program fee: ~$10,000
- Ideal for buyers with significant equity
If You Do Not Qualify with Both Payments
These programs help eliminate or offset your current mortgage payment for qualification purposes.
- Convert Your Current Home to a Rental
You may use projected rental income to offset your payment.
Typical requirements:
- Fully executed 12-month lease
- Proof of security deposit
- Often 30%+ equity in the property being converted to a rental
- Non-QM Departing Residence Program
A streamlined rental-based solution:
- No lease or deposit required
- Appraiser provides a market rent survey
- Lender offsets your existing payment
- The rate for a non-QM loan is typically only about an eighth higher than a QM loan, and you do not need to be concerned about securing an actual tenant and lease
- Pending Sale Exclusion (Non-Jumbo Loans)
If your new loan amount falls under the current high-balance conforming limit and you have an executed buyer contract with contingencies removed, many lenders will exclude your current mortgage payment entirely from qualification.
This is one of the most powerful — and underused — strategies.
- “Buy Before You Sell” Program
Select lenders now offer guaranteed buyout programs:
- You purchase your new home non-contingent
- The lender guarantees to purchase your current home if it doesn’t sell within a set period
- Your current housing payment is excluded from qualification
- Typical fee: ~2.4% of your sale price, paid at closing when you sell your current home
- Bridge Loans (Private Financing)
Short-term private loans that provide access to your equity.
- Very fast and flexible
- High interest rates and costs
- Generally a last-resort option in high-cost markets because this can cost tens of thousands of dollars
The Bottom Line
Buying before selling is not only possible — it is often strategically superior. The key is choosing the correct structure based on your financial profile and goals.
If you’re considering making a move, it’s critical to design your strategy before you write offers.
Contact me if you have any questions or have any real estate financing needs.
