Myth #25: You Can’t Buy a New Home Because Your DTI is Too High (You Have to Sell First)
Buying before selling is possible — here’s how creative financing strategies make it happen.
The Myth
You can’t buy your next home because your debt-to-income ratio is too high — you have to sell first.
The Truth
With the right financing tools, you can buy before you sell. Options like bridge loans, temporary financing, and cash buy-before-sell programs give you flexibility without being boxed in by DTI.
Why People Believe This
On paper, adding a new mortgage before selling your current home makes your debt look too high for approval. Many assume this means they’re stuck until they sell — but lenders with creative strategies know how to work around it.
Detailed Breakdown
- Bridge Loans: Short-term loans that use your current home’s equity to cover the down payment on your next home. Once your old house sells, the bridge loan is paid off.
- Buy Before You Sell Programs: These allow you to make a cash-like offer on your new home without having sold the old one yet.
- Equity Unlocking: HELOCs, home equity loans, or specialized programs can free up funds to get you into the next property.
- Strategic Structuring: Sometimes the right combination of timing, temporary financing, and creative underwriting is all it takes to make the math work.
Real-World Example
A client in Lake Country wanted to upgrade but thought she had to wait until her house sold. With a bridge loan, we unlocked $150,000 of her equity, allowing her to write a winning offer on her dream home. She closed smoothly, then sold her old home a few weeks later, paying off the bridge loan without stress.
The Bottom Line
Being “stuck” because of DTI is a myth. The right strategy makes it possible to move forward now — not six months from now.
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