Refinance Current Home Then Buy New Direct

Homeowners typically use one of two refinancing methods to secure funds for a new purchase:

: A short-term loan designed specifically to "bridge" the gap between buying a new home and selling your old one. It allows you to borrow up to 80% of your current home's value to cover the new down payment. Essential Timing & Wait Periods How Soon Can You Refinance a Mortgage? | 2026 refinance current home then buy new

: You replace your current mortgage with a larger one and receive the difference in a lump sum. This cash can then be used as a down payment for the new home. Homeowners typically use one of two refinancing methods

Refinancing your current home to buy a new one is a strategic way to leverage existing equity for a down payment or to improve your debt-to-income ratio (DTI) before applying for a new mortgage. However, this path involves strict timing requirements, potential tax impacts, and occupancy clauses that could lead to legal issues if ignored. Core Strategies for Leveraging Equity | 2026 : You replace your current mortgage