One of the toughest things about buying a NEW house is selling the OLD house.  Packing and cleaning and staging.  All while keeping everything picture-perfect to be ready for showings at a moment’s notice.

If you’ve lived in your current home for a bit, chances are good that you’ve built up some nice equity, particularly in our rapidly-rising Colorado market.  Did you know that you can use that equity to complete the purchase of your new home BEFORE you sell your current home?

Many lenders can provide you with a HELOC (Home Equity Line of Credit) or a Bridge Loan based on your equity.  You can use these funds as your “cash at closing” for your new home purchase.  So what does this mean?

  • You can write an offer on your new home without a Contingency (clause in your offer that says “we want to buy, but we have to sell a house, first”.  Contingent offers are a risk for sellers, so this can give you a leg up over the competition).
  • You move forward with the purchase of your new home, as normal.  You will still need to qualify (and be pre-approved) for your new mortgage.
  • Keep packing and purging while waiting to close on your new house!
  • After you close, you can leisurely move everything to your new home, and then put your EMPTY house on the market!

So what’s the downside?

You will need to qualify for this strategy with your lender.  Basically, they’ll want to know if you can handle paying two mortgages – new house and old house –  for 30-60 days (time it takes to sell the old house).

You will also have to pay a bit of interest on your HELOC or Bridge Loan for this same time period.  When your old house sells, this loan will be paid off at closing.

Many folks think the small interest payments on the HELOC or Bridge are well worth eliminating the stress of living in a house that’s on the market, being able to plan a leisurely move, and being able to submit a contingency-free offer on the new home.

Check with your Realtor about this strategy, and for recommendations of local lenders that can provide HELOC or Bridge Loan options.  This could be the solution you’ve been waiting for!


Buyers, Sellers