Planning a New Purchase While You Own Your Current Home
Moving up, downsizing, or relocating while you own a current home creates a sequencing problem. The right path depends on your income, available equity, cash reserves, and timing.
The Sequencing Problem
Available equity, cash reserves, income and both housing expenses shape the options available. In some situations, a current-home sale, equity access, or a contingency can be part of the plan.
There are three main ways to solve this problem — each with different risk profiles, costs, and qualification requirements.
Bridge Loan
A short-term loan that may be secured against eligible equity in your current home. When the structure and qualification support it, bridge financing can help coordinate a new-home closing before the existing home sells. The bridge loan is typically repaid when the current home closes.
- Requires sufficient equity in the current home
- Carries its own closing costs and fees
- Structured with a 9-month term
- May require qualifying for two — and, in some cases, three — mortgage obligations simultaneously
- Have a long-term plan or pivot if the current home does not sell within the expected timeframe
Contingency Offer
A purchase offer that is contingent on the sale of your current home. The seller accepts the offer but retains the right to continue marketing. If another offer comes in, you typically have 72 hours to remove the contingency or walk away.
- Sellers in competitive markets often decline contingency offers
- Kick-out clauses can create time pressure
- Lower risk than carrying two mortgages
- May require a larger earnest money deposit
Coordinated Closing
Timing the sale of your current home and the purchase of the new home to close on the same day or within days of each other. Requires careful coordination between both transactions.
- Depends on both transactions staying on schedule
- Any delay in the sale can jeopardize the purchase
- Requires strong communication between all parties
- Can work well in stable markets with predictable timelines
Before the Planning Review
Can I qualify for a new mortgage while still carrying my current one?
Potentially, but that depends on your current housing expense and the proposed new home’s housing expense — including principal and interest, property taxes, homeowners insurance, HOA dues, and any other applicable obligations. The key question is whether your income supports the full set of obligations. A planning review will work through the numbers.
How much equity do I need for a bridge loan?
Bridge financing generally relies on eligible equity in the current home after the existing mortgage and the proposed bridge structure are considered. The specific requirement varies by lender, program, and the complete financial picture.
What happens if my current home doesn't sell quickly?
This is the primary risk of a bridge loan. If the current home takes longer to sell than expected, you may carry multiple mortgage obligations for longer than planned. A planning review should include a long-term contingency plan and possible pivot before you proceed.
Is a contingency offer ever a good strategy?
Yes — particularly in slower markets where sellers have fewer competing offers. In competitive markets, sellers often prefer offers without contingencies. The right approach depends on the market and the specific property.
Let's Work Through the Sequencing
A planning review will map out the options based on your current-home equity, cash reserves, income, ability to carry housing obligations, and timing — before you make an offer.
Start a Planning Review