Yes, if you arrange the money before you find the house. The tools are a bridge loan, a home equity line of credit, a smaller down payment you recast after your sale, or cash from other savings, and the time to set them up is before your current home goes on the market.
The alternative is an offer contingent on selling your home. That protects you from owning two houses. When sellers have other offers, the contingent one is usually the first they set aside, because it depends on a sale they can't see or control.
Option 1: A home-sale contingency
Your purchase is conditioned on selling your current home by a set date.
It costs nothing extra and limits your risk. It works best when the home you want has been on the market a while, or when your own home is already under contract and the contingency is short.
To make it stronger, list your home before you make the offer, price it to sell, and give the seller a short deadline.
Option 2: A bridge loan
A short-term loan, usually for about a year, borrows against the equity in your current home so you can buy before it sells. You repay it from the sale proceeds.
It lets you write an offer that doesn't depend on your sale. The tradeoffs are cost and qualification: bridge loans carry higher rates and fees than a regular mortgage, and your lender has to be comfortable with you carrying both homes for a period.
Option 3: A home equity line of credit
A HELOC on your current home can fund the down payment on the next one. It usually costs less than a bridge loan.
Set it up before you list. Lenders generally won't open a line of credit on a home that's already for sale.
Option 4: Buy now, then recast your new mortgage
You buy the next home with a smaller down payment from the cash you have now. After your current home sells, you apply the proceeds to the new mortgage as a lump-sum principal payment, and the lender recalculates your monthly payment on the lower balance. Your interest rate and loan term stay the same.
A recast costs far less than refinancing: lenders typically charge a fee of a few hundred dollars and require a minimum lump sum, often $5,000 to $10,000 or a percentage of the balance. There's no new appraisal or closing.
The tradeoffs: until your home sells, you carry both homes and a larger payment on the new one. A down payment under 20% usually means mortgage insurance, and it doesn't come off automatically when you recast, so ask your lender how to remove it once your balance is low enough. Recasting is generally available on conventional loans only. FHA, VA, and USDA loans don't allow it, and not every lender offers it, so confirm with your lender before you choose the loan.
Option 5: Other savings or investments
Some buyers fund the down payment from savings or a brokerage account and replenish it after the sale. Before you sell investments to do this, ask your financial adviser about the tax cost.
A gift from family can also go toward the down payment. Your lender will ask for a signed gift letter and a record of the transfer, so tell them early.
Which one fits
- Plenty of choices in your target neighborhood and no rush: a contingency or selling first may be all you require.
- Few homes like the one you want: arrange a HELOC or bridge loan before you start looking, so you can act the day it lists.
- Enough cash for a smaller down payment and room to carry both homes for a few months: buy now on a conventional loan and recast after your sale.
- Tight on the monthly cost of two homes: sell first and negotiate a rent-back so you can stay put until your next home closes.
The order of operations
- Talk with a lender about what you qualify for while carrying both homes, and whether the loan you're considering can be recast.
- Set up a HELOC, if that's your route, before your home is listed.
- Get a clear read on your current home's price and timeline with a Home Audit and market assessment.
- Then start looking, ready to write the offer you want.
Should I buy first or sell first? covers the order of the two moves, and How much will I actually walk away with? covers how much you'll have to work with. For the full picture of a move within the area, see rightsizing.