BUY BEFORE YOU SELL LOANS CALIFORNIA — OLD PAYMENT EXCLUDED FROM DTI

Can I Buy a House Before I Sell My Current House?

You found your dream home. The seller wants a non-contingent offer. Your current home needs two months to sell properly. Traditional financing says “sell first, then buy.” Meanwhile, three other buyers are submitting offers today. You could lose this opportunity waiting for perfect timing alignment.

Most lenders will tell you two options:

Option 1: Bridge loan. Expensive rates with premium pricing. Plus origination fees. Six-month balloon payment. Costly.

Option 2: Claim your current home is becoming a rental. Fake lease. Fake rental income worksheet. Lie on your loan application. Dishonest and risky.

There’s a better way. Concurrent cash-out refinance on your current home plus purchase loan on your new home. Both close simultaneously in 30 days. Normal refinance rates with no additional cost to the interest rate, not expensive bridge rates. Your old payment doesn’t count against you when qualifying for the new purchase. No rental games required.

How Does Concurrent Refinance Work in California?

Concurrent refinance lets you refinance your current home and buy a new one at the same time. You cash out up to 70% of your current home’s value, use that money for your new down payment, and both loans close together within 30 days. The key advantage: your existing mortgage payment doesn’t count when qualifying for the new purchase, so you qualify for significantly more house.

This works across California’s major markets - San Diego, Los Angeles, the Bay Area (including Alameda and Contra Costa counties), Orange County, Sacramento, and the Central Valley. Two separate loans, no cross-collateralization, both close on the same day.

How Do You Buy Before Selling Your Current Home in California?

Here’s how it actually works:

Step 1: Cash-out refinance your current home

• Up to 70% loan-to-value
• Normal refinance rates with no additional cost to the interest rate
• Standard closing costs
• No prepayment penalty

Step 2: Purchase loan on new home

• Use refinance cash for down payment
• Your old mortgage payment is excluded from DTI
• Qualify for more house
• Both loans close same day

Example: You own a $800k home with $400k mortgage. You can refinance up to 70% LTV ($560k), pay off the $400k balance, walk away with $160k cash. That $160k becomes your down payment on a $900k new home. Both transactions close simultaneously within 30 days.

Total time? 30 days. No waiting between transactions. No expensive bridge loan rates. No rental claims. Just honest, straightforward buy-before-you-sell financing.

The coordination happens at the escrow level. Both loans process in parallel - appraisals ordered simultaneously, underwriting happens concurrently, documents prepared for same-day signing. You sign closing papers for both transactions at one appointment. The refinance funds transfer first, making them immediately available for the purchase closing. Seamless.

Most clients are surprised how smooth this is compared to traditional bridge loans or trying to coordinate separate transactions. No juggling multiple closing dates, no temporary housing, no storage units, no coordination stress between selling and buying. Both close, both done, move when ready.

What Is DTI Exclusion and Why Does It Matter?

DTI exclusion means your current mortgage payment doesn’t count against you when qualifying for the new purchase. Instead of calculating both payments together (which kills most people’s qualification), lenders only look at your new payment. This is legal because you’re selling the old property - the payment is temporary. Result: you can qualify for $100k-$200k more house depending on your income and current payment.

Works the same whether you’re in San Francisco, Oakland (Alameda County), Walnut Creek (Contra Costa County), San Diego, or anywhere in California. The underwriter excludes your old PITI from debt-to-income calculations completely.

How Does DTI Exclusion Change Your Buying Power in California?

Traditional lender approach:

• Old payment: $3,500/month
• New payment: $4,500/month
• Total DTI calculation: $8,000/month = 48% ratio
• Result: Either don’t qualify or qualify for less house

Our lenders’ approach:

• Old payment: $0 (excluded from DTI)
• New payment: $4,500/month
• Total DTI calculation: $4,500/month = 27% ratio
• Result: Easy approval + qualify for significantly more

Why don’t they count the old payment? Because you’re selling the property after you move. It’s temporary. The lender underwrites it understanding you’ll pay off that refinance when the house sells. No balloon forcing you to sell, but the intent is clear.

This DTI exclusion makes a massive difference in California’s expensive housing market. When median home prices hit $850k and monthly payments run $5,000-$6,000, having your old payment excluded opens up properties that traditional financing makes impossible. You’re not stretching beyond your means - you’re just not being penalized for the temporary period between closing and selling.

Had a client couple in Berkeley (Alameda County) making $180k yearly. Traditional lender counted both payments, qualified them for $650k purchase. Our concurrent program excluded the old payment, qualified them for $850k purchase. That’s $200k more buying power. Same income, smarter underwriting.

Think about what $200k more buying power means in California. In San Diego or Orange County, that’s the difference between a 3-bedroom and a 4-bedroom. In the Bay Area (San Francisco, Oakland, Walnut Creek), it’s the difference between a condo and a house. Different neighborhood. Better schools. Larger home. The difference between settling and getting what you actually want.

Why Do Other Lenders Force the “Rental Game”?

Most lenders can’t do concurrent refinance-purchase with DTI exclusion. So they make you claim your home is becoming a rental - requiring fake leases, inflated rental income worksheets, and lying on federal loan applications. If you sell instead of renting, that’s loan fraud with serious penalties.

Our program eliminates this entirely. You’re buying before selling - we underwrite it exactly as that. When you sell, you pay off the refinance. Honest, transparent, no rental games required.

Can You Buy a House Before Selling Your Current Home?

Yes. Concurrent refinance programs let you buy before selling without expensive bridge loans or claiming your home is a rental. You refinance your current home at 70% LTV, use that cash for the new down payment, and close both transactions simultaneously. Available throughout California including Los Angeles, San Diego, Orange County, and the Bay Area (San Francisco, Alameda, and Contra Costa counties). Credit minimum is 600, both loans close in 30 days.

The catch? You need enough equity. If you’re above 70% loan-to-value on your current home, this won’t work. But if you’ve owned 3+ years in California’s appreciated market, you probably have the equity.

How Much Cash Can You Get at 70% LTV?

Up to 70% of your current home value, after paying off the existing mortgage. Maximum $5 million cash out.

Example: $800k home with $400k mortgage = 70% LTV of $560k - $400k payoff = $160k cash available

You need 30% equity remaining after the refinance. If your current mortgage is above 70% of your home’s value, this program won’t work. Most California homeowners who’ve owned 3+ years have sufficient equity from appreciation. We calculate your exact available cash during pre-approval.

California Market Availability

Available throughout California including Los Angeles, San Diego, Orange County, the Bay Area (Alameda and Contra Costa counties), Sacramento, Central Valley, and all other regions. Program qualifications stay consistent: 600+ credit, 30% remaining equity after 70% LTV refinance, both California properties, concurrent 30-day closing.

Concurrent Refinance vs Bridge Loans

Bridge loan: Premium rates with additional costs, origination fees, 6-12 month balloon payment. Expensive short-term financing requiring forced sale timeline.

Concurrent refinance: Normal conventional rates with no additional cost to the interest rate, standard closing costs, 30-year term, no balloon. No forced sale timeline.

Significant monthly and upfront savings compared to bridge loans. Bridge loans only make sense for very short-term needs (under 90 days) or when you don’t have 30% equity for refinancing.

Non-Contingent Offers in California

With cash from your refinance secured before making offers, you submit clean purchase contracts without sale contingencies. Sellers prefer certainty over higher prices with contingencies.

Real example: Client lost three Oakland offers despite bidding $15k-$20k more - non-contingent buyers won every time. Fourth house, we did concurrent refinance first, made non-contingent offer, won at $785k against two higher offers at $795k and $800k. Seller picked certainty.

The concurrent program brings back non-contingent advantage without waiting for your sale to close. This matters in competitive markets like San Jose, Sacramento, and Los Angeles County where bidding wars remain common.

Property Transition Timing

Move to your new home first, then sell your old home empty and staged for better presentation. No temporary housing, no coordinated moving schedules, no showing stress while living there.

Example: Walnut Creek clients with three kids and two dogs - showing while living there was a nightmare. They moved to their new Pleasanton home, hired a stager for the empty Walnut Creek house, sold in two weeks for $45k over asking.

No balloon payment means no forced timeline. Sell within 30 days or wait six months for optimal spring pricing. Your choice. Families helping with transition purchases can use non-occupant co-borrower programs if concurrent refinancing isn’t available.

After You Sell Your Old Home

Sale proceeds pay off the cash-out refinance. You keep the remaining equity. No prepayment penalty.

Your options:

• Keep your purchase loan as-is (most people do this)
• Refinance your new home if rates dropped or you want to change loan structure

Example: Client sold old home eight months after moving, paid off the refinance, then refinanced the new home when rates dropped to 5.75%. But if rates hadn’t dropped? Would’ve kept the purchase loan. No forced refinancing, no cross-collateralization, complete flexibility.

Qualification Requirements

Credit: 600 minimum (better credit = better rates) Equity: 30% remaining after 70% LTV refinance Income: Standard documentation (W2s, paystubs, tax returns) Assets: 6 months PITI reserves (varies by loan size) Properties: Both must be in California

Most people qualify easier than traditional financing because DTI exclusion gives more buying capacity. The equity requirement is the main constraint. We calculate your exact available cash and qualification in about 20 minutes during pre-approval. (510) 589-4096.

Eligible Property Types

Program accepts standard and specialty properties including single-family homes, condos (warrantable and non-warrantable), townhomes, multi-unit properties (2-4 units), co-ops, condotels, large acreage, hobby farms, and mixed-use properties.

Both your current home and new purchase must be in California. Non-warrantable condos and specialty properties that conventional lenders decline are accepted, expanding your buying options in California’s complex property market.

Risk Management Considerations

You’re carrying two mortgages until your old home sells. Budget for 3-6 months minimum, even if you expect faster sale. Consider monthly costs, market timing, sale preparation needs, and backup strategies.

Best candidates: Strong income, solid equity, realistic sale timeline expectations, emergency reserves for longer-than-expected holding periods.

Risky situations: Stretching to barely qualify, hoping for 30-day sale with no backup plan. Make sure you can comfortably carry both payments for 6-12 months before committing.

Program Comparison

Concurrent program beats bridge loans on cost and traditional lenders on qualification. Only downside: you need 30% equity remaining. Bridge loans still work for very short timelines (under 60 days) or unique situations.

Bridge Loans as Alternative

If you don’t have 30% equity for concurrent refinance, traditional bridge loans remain available. Short-term financing (6-12 months) secured by your current home, with balloon payment when it sells. Premium rates with additional costs and origination fees.

Bridge loans make sense for very short-term needs (under 90 days), insufficient equity for refinancing, or when you don’t want to refinance an existing low-rate mortgage. More expensive than concurrent programs but works when equity constraints prevent refinancing. We evaluate both options and recommend what fits your situation.

Should You Get a Buy Before You Sell Loan in California?

The concurrent refinance-purchase program provides essential financing flexibility for California homeowners seeking to optimize their transition timing without expensive bridge loans or dishonest rental games.

Every buy before you sell situation involves unique timing considerations, equity positions, and financial circumstances. The concurrent program works for most people with solid equity, but not everyone. We evaluate your specific situation and recommend the best path.

Our lenders specialize in California concurrent refinance-purchase transactions. They understand the DTI exclusion rules, the concurrent closing coordination, and the documentation required for smooth transactions.

Here’s what happens when you call:

1. Quick equity assessment (current home value and mortgage)
2. Available cash calculation (70% LTV - existing mortgage)
3. Purchase qualifying (with old payment excluded from DTI)
4. Program recommendation (concurrent vs bridge vs other options)
5. Next steps if you want to move forward

Takes about 20 minutes. No obligation. You’ll know exactly how much cash you can access, how much house you can buy, and whether this program fits your situation.

Call (510) 589-4096 to discuss concurrent refinance-purchase financing or view all niche program options.

Explore More Niche Programs

Not sure if buy before you sell fits your situation? Compare our other niche program options including:

• Departing residence income - Future rental qualification
• No-seasoning cash-out - Immediate equity access
• Bridge loans - Traditional short-term financing
• Cash-out refinance - Standard equity access

View All California Loan Programs →

California’s competitive housing market rewards buyers who can move decisively while protecting their financial interests. The concurrent refinance-purchase program provides that strategic advantage without expensive bridge loans or dishonest rental claims. If you have the equity, it’s usually the smart play.