I got a message recently from someone dear to me wrestling with a hard decision. Life has thrown them a curveball, and suddenly moving might be urgent, but they aren’t sure how to make the finances work, or how to time the possible sale of their home with a purchase of their next home. My goal is to share what I would share with them incase it’s helpful for you as you’re thinking through your next move.

These kinds of questions come up all the time. In fact, I just helped a client in Payson sell their home while purchasing a home in Arkansas, where the sellers of the Arkansas home were themselves buying another home. So naturally, there were a lot of dominos that needed to fall in place for everything to go smoothly.

But thankfully, if you’ve owned a home in Utah for more than say 4 years, chances are your home is worth more than you paid, as was the case for my clients. The difference between what you paid (or still owe on the mortgage) and what your home is worth today is called equity, and you can use it to help finance your next purchase.

So lets walk through some of the tools available, from timing a purchase around the sale of your current home, to keeping it as an investment property while still leveraging your equity, along with the pros and cons of each.

That Payson to Arkansas move worked because my client’s equity in their home gave them options. And it's not a rare situation with how much home values have increased the past decade. U.S. mortgage holders are sitting on $18 trillion in home equity right now, which is an all-time high. Of that, $11.7 trillion is considered accessible (meaning the portion you can actually borrow against while still leaving a enough of an equity cushion in the home for your lender's comfort).

That works out to roughly $212,000 in accessible equity for the average homeowner with a mortgage.

There are three ways to approach this route:

This is usually the cleanest route. You sell your current home, know your exact number, then shop with a clear budget. The tradeoff is timing and rental hassles. If your next home isn't ready, you may need a short-term rental, or a rent-back agreement, where you sell your home but pay the new owner rent to stay a little longer while you finish your move.

A HELOC (a home equity line of credit, essentially a flexible loan against your home that you can draw from as needed) or a bridge loan (a short-term loan that "bridges" the gap between buying your next home and selling your current one) can fund the down payment on your next home before you've sold your current home. Just keep in mind you need enough equity in your current home to actually make this option work.

The biggest benefit here is that you move once instead of twice, and you're not shopping under a deadline. The tradeoff is carrying two properties for a stretch.

**Of course, you can always skip the HELOC and fund your downpayment with cash you’ve saved up. But for the purposes of this example, I’m assuming you’re wanting to pull equity out of your current home to help with the purchase.

You make an offer on the home you’d like to purchase that’s dependent on you selling your current home first. No bridge financing needed. The tradeoff is that contingent offers are weaker in a competitive market, since sellers often prefer a buyer who isn't tied to another sale closing first. However, I’m seeing contingent offers all the time in this market. In fact, my client’s in Payson used this exact strategy on their Arkansas purchase. They’re scheduled to officially transfer the home to the new buyers on Monday, and will close on their new home next Friday.

The thing with Contingent offers is that you need to already have your home listed, or ready to be listed within just a few short days. So for that reason, I usually recommend that we’ve already had a discussion about what your home would sell for, taken photos, and possibly even listed your home by the time we’re making contingent offers.

You don't always have to sell to make a move happen. Plenty of homeowners keep their current home as a rental and still buy their next one, using the same equity in their home to go towards their downpayment.

Here's how:

A HELOC or a cash-out refinance (replacing your current mortgage with a new, larger one and pocketing the difference in cash) lets you pull equity out of your current home without selling it. That cash becomes the down payment on your next home, and your old home starts generating rental income.

The upside is you keep an your home as an investment that provides a second income stream and long-term appreciation. The tradeoff is you becoming a landlord, with everything that comes with it. Plus, you're now carrying two mortgage payments and a HELOC payment.

But if the rental income covers your rental’s mortgage payment, your HELOC payment, and leaves a little left over for repairs/vacancy, this is one of the greatest strategies to building long-term wealth with real estate. It's worth running the numbers carefully, and talking with a professional before going this route.

Can I actually access my equity before I sell?
Yes. A HELOC or home equity loan lets you borrow against your current home while you still own it. Most lenders want you to keep at least 10-20% equity in the home after borrowing. Other options exist like bridge loans and Cash out refinances, but from what I’ve seen, HELOCs typically have the best terms for this specific use case.

What if my current home doesn't sell in time?
This is exactly why some people choose the contingent offer route, or negotiate a rent-back period with their buyer so they're not scrambling to move out immediately. If your purchase is contingent on selling your home, and it doesn’t sell in time, you can either renegotiate the closing deadlines with the seller, or cancel the purchase. A good agent will help you stay way ahead of this so nothing is ever last minute.

Do I need excellent credit to qualify for a HELOC or bridge loan?
Requirements vary by lender, but strong equity and debt to income ratios (more income relative to total monthly debt payments) matter as much, or even more than your credit score. It's worth talking to a lender early, before you're under time pressure. That way you know your options ahead of time.

Is keeping my home as a rental actually worth it?
It depends on your numbers (how much it cashflows after paying all expenses and repairs/vacancy), and your appetite for being a landlord. It can be a wonderful way to build consistent, reliable, long-term wealth. But it's not the right fit for everyone. Worth a real conversation before deciding.

Are home equity loans risky?
Any loan against your home carries risk (including your primary mortgage), and it's worth talking through what those risks are with a lender or financial advisor before deciding. But for homeowners with substantial equity and a clear plan, it's a common and manageable tool, not a gamble.

Especially because lenders won’t lend you more than the home is worth and require a clear ability to make the payments. Real estate debt is different from margin debt like you would see in the stock market where you can be forced to sell your stocks or bonds after they drop a certain amount. As long as you keep making payments on your real estate debt, no one will ever force you to sell no matter how low values drop. Which is why your cashflow is so important.

If you already own a home and are eyeing a move up, don't assume you need a mountain of new cash saved. The equity you've already built is often your biggest advantage. Whether you sell your home first, buy first, or keep your current home as a rental.

Not sure how much equity you have? Reply and I'll help you find out.

You don't have to choose between selling now and waiting until you're ready to buy. There's a real path to doing both at once, or even keeping your current home while you move on. It starts with knowing your numbers.

Thinking about making a move but not sure how the timing works? Let's talk through your specific situation. I'll walk you through which path fits best.

Here to serve,

P.S. Want to know exactly how much equity you have in your current home? Reply with your address and I'll send a free, no-pressure breakdown.