BUY BEFORE YOU SELL LOANS CALIFORNIA — SEAMLESS HOME TRANSITION

Buy Before You Sell Loans California – Old Payment Excluded from DTI

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 at 7-10% interest. Plus 1-3% origination fee. Six-month balloon payment. Expensive.

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. Regular refinance rates, not 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.

Step-by-Step: Buy Before Selling Your Current Home

Here’s how it actually works:

Step 1: Cash-out refinance your current home

• Up to 70% loan-to-value
• Regular refinance rates (6-7% range)
• 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 DTI Exclusion Changes Your Buying Power

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 Other Lenders Force the “Rental Game” Workaround

Most lenders can’t or won’t do concurrent refinance-purchase with DTI exclusion. So they work around it with the rental game.

Here’s what they tell you: “Just claim you’re converting your current home to a rental property. We’ll count the rental income instead of the mortgage payment.”

What they don’t tell you:

• You need a signed lease (often fake)
• You need rental income worksheets (often inflated)
• You need to claim rental intent on federal documents
• If you sell instead of renting, you lied on your application
• Loan fraud carries serious penalties

I’ve seen this for 20+ years. Borrowers uncomfortable with it. Loan officers coaching them on what to say. Underwriters looking the other way. Everyone pretending it’s normal.

Our program eliminates all that. No rental claim needed. You’re buying before selling - we underwrite it exactly as that. When you sell your old home, you pay off the refinance. That’s the deal. Honest, transparent, no games.

Some people actually do convert their old home to a rental. That’s different. If you’re genuinely planning to rent it, then yes, claim rental income. But if you’re planning to sell and your lender is coaching you to “just say it’s a rental” - that’s the game. And you don’t need to play it.

The concurrent refinance-purchase program eliminates the rental game entirely. You’re doing exactly what you say you’re doing - buying before selling. The lender underwrites it as a temporary dual-property situation with a clear exit strategy: sell the old home, pay off the refinance. No fake leases, no inflated rental income projections, no crossing your fingers hoping the underwriter doesn’t ask too many questions.

This honest approach also protects you legally. Claiming rental income when you intend to sell could constitute loan fraud if discovered. The penalties aren’t worth it. The concurrent program gives you the same qualification advantages (old payment excluded) without any of the legal risk or ethical compromises.

Most loan officers won’t tell you this exists because they don’t have access to lenders who offer concurrent refinance-purchase with DTI exclusion. They’re limited to their bank’s standard programs, so they coach you through the rental workaround. We work with lenders specifically because they offer programs most others don’t.

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 for ultra-high-value properties.

Example calculations:

Scenario 1: Moderate equity

• Home value: $600k
• Current mortgage: $350k
• 70% LTV: $420k
• Available cash: $420k - $350k = $70k

Scenario 2: Strong equity

• Home value: $800k
• Current mortgage: $400k
• 70% LTV: $560k
• Available cash: $560k - $400k = $160k

Scenario 3: High equity

• Home value: $1.2M
• Current mortgage: $500k
• 70% LTV: $840k
• Available cash: $840k - $500k = $340k

Scenario 4: Ultra-high equity (capped)

• Home value: $12M
• Current mortgage: $2M
• 70% LTV: $8.4M
• Minus payoff: $6.4M potential
• Available cash: $5M (program maximum)

The $5 million cash out cap only affects properties valued above approximately $7-8 million with significant equity positions. For most California homeowners, the 70% LTV limit is the primary constraint.

Need 30% equity remaining after the refinance. If your current mortgage is above 70% of your home’s value, this program won’t work - you’d need to bring cash to the refinance, which defeats the purpose.

California home values have appreciated significantly. Most homeowners who’ve owned 3+ years have plenty of equity. Even with small down payments originally, appreciation built equity fast. We calculate your exact available cash during the pre-approval process.

Buy Before Sell Programs Across California Markets

What Buy Before Sell Opportunities Exist in San Diego County?

San Diego’s large military and veteran population creates frequent relocation needs. PCS orders don’t wait for your home to sell. Concurrent refinance handles Camp Pendleton transfers, naval reassignments, and civilian relocations without bridge loan costs. Strong appreciation over the past decade means most San Diego homeowners have the equity needed for 70% LTV refinancing.

How Does the Program Work in Los Angeles and Orange County?

LA and OC represent California’s most competitive markets. Multiple-offer situations are standard even with higher rates. Non-contingent offers matter here more than anywhere. Concurrent refinancing gives you the cash and qualification power to compete with all-cash buyers. Whether you’re moving from Pasadena to Irvine or downtown LA to Huntington Beach, the program works the same: cash out at 70%, old payment excluded from DTI, close in 30 days.

What Are the Bay Area Benefits for Buy Before Sell Financing?

Bay Area markets demand the DTI exclusion more than anywhere. When median prices run $1M-$1.5M, your old $5,000 payment absolutely kills traditional qualification. Oakland, Berkeley, and Fremont in Alameda County - all benefit from concurrent refinancing. Walnut Creek, Concord, and Pleasant Hill in Contra Costa County - same program, same advantages. San Francisco proper works too, though condo complexities sometimes require additional underwriting.

Tech worker relocations drive Bay Area buy-before-sell needs. Google employee moving from Mountain View to Oakland? Apple employee relocating from Cupertino to Berkeley? The concurrent program handles it.

How Does Buy Before Sell Work in Sacramento and the Central Valley?

Sacramento’s growing market creates interesting opportunities. State employees relocating, Bay Area refugees seeking affordability, and local upgraders all need buy-before-sell options. The concurrent program works particularly well here because equity from expensive Bay Area homes funds larger purchases in Sacramento’s more affordable market.

Central Valley markets (Fresno, Stockton, Modesto) qualify the same way. If you’re relocating from coastal California to the Valley, your coastal equity goes far here.

What Statewide Coverage Is Available for Buy Before Sell Programs?

Licensed throughout California. Whether you’re in San Luis Obispo, Ventura, Riverside, San Bernardino, or anywhere else, the program qualifications stay consistent: 600+ credit, 30% remaining equity after 70% LTV refinance, both California properties, concurrent 30-day closing.

Concurrent Refinance Rates vs Bridge Loan Costs

Let’s compare actual costs:

Traditional bridge loan:

• Rate: 7-10% (currently 8-9% typical)
• Origination: 1-3% of loan amount
• Term: 6-12 months
• Balloon payment: Full balance due
• Example: $150k bridge at 8.5% = $1,063/month + $3,000 origination

Our concurrent refinance program:

• Rate: 6-7% (standard refinance rates)
• Origination: Standard closing costs (0.5-1%)
• Term: 30 years (or 15 if you want)
• Balloon payment: None
• Example: $150k cash-out at 6.5% = $948/month + $1,500 closing costs

Monthly savings: $115. Upfront savings: $1,500. No balloon pressure to sell within six months.

Bridge loans made sense before these concurrent programs existed. Now? They’re expensive and unnecessary for most situations. Only time I recommend bridge loans is when you need very short-term funding (under 90 days) or your equity/credit situation doesn’t qualify for conventional refinancing.

Some banks still push bridge loans hard. Why? Better profit margins for the bank. Not better for you.

Non-Contingent Offers: Your Competitive Edge

California’s competitive housing markets strongly favor non-contingent offers. Sellers prefer certainty over higher prices that include sale contingencies.

With cash from your refinance secured before making offers, you submit clean purchase contracts without sale contingencies. This significantly improves your competitive position in multiple offer situations common throughout California markets.

Real example from 2024: Client lost three offers in Oakland (Alameda County). Each time, non-contingent buyers won even though my clients offered $15k-$20k more. Fourth house, we did the concurrent refinance-purchase program first. Made non-contingent offer. Won the house at $785k against two other offers at $795k and $800k. Seller picked certainty.

Similar story in Irvine (Orange County) - client competing against all-cash buyers. Non-contingent financing through concurrent refinance put them on equal footing. Beat two higher offers because they could close fast with certainty.

Non-contingent offers also strengthen your negotiating position for other contract terms including price, timeline, and inspection periods that benefit your overall purchase strategy. Sellers see you as equivalent to a cash buyer from a certainty perspective, even though you’re financing.

When rates were low (2020-2021), everyone could make non-contingent offers because selling their current home was easy. Now? Higher rates, slower sales, more uncertainty. The concurrent refinance program brings back that non-contingent advantage without waiting for your sale to close.

This matters especially in competitive markets like San Jose, Sacramento, and throughout Los Angeles County where bidding wars are still common even with higher rates.

Property Transition Management

Concurrent financing simplifies the physical aspects of moving by eliminating the need for temporary housing, storage arrangements, and coordinated moving schedules that complicate traditional simultaneous transactions.

Single move strategy reduces costs and stress while allowing proper preparation of your current home for optimal market presentation after you’ve relocated to your new property.

This timeline separation often results in better sale prices since you can prepare and market your current home without the pressure of coordinated closing deadlines.

Professional staging and repairs become more feasible when you’re not living in the property during the sale process, potentially improving both marketing timeline and final sale price.

Had clients in Walnut Creek (Contra Costa County) with three kids and two dogs. Showing their house while living there? Nightmare. Constant cleaning, leaving for showings, dogs barking at potential buyers. They did the concurrent program, moved into their new place in Pleasanton, then hired a stager for the old Walnut Creek house. Sold in two weeks for $45k over asking because it showed perfectly. That’s the advantage of selling empty and staged.

When Is the Optimal Time to Sell When Using This Program?

The concurrent refinance program allows you to choose optimal market timing for your current home sale rather than forcing sale coordination with your purchase timeline requirements.

You can wait for spring market (better pricing), finish repairs properly, or market during high-inventory months when buyers have fewer choices. Flexibility is the advantage.

Seasonal market variations, local inventory levels, and property preparation time all become strategic choices rather than transaction constraints when using concurrent financing. No balloon payment means no forced timeline.

Some people sell within 30 days of moving. Others take six months to maximize price. Your choice. Families helping with transition purchases can use non-occupant co-borrower programs if concurrent refinancing isn’t available.

What Happens After You Sell Your Old Home

The payoff process is straightforward:

1. Accept offer on your old home
2. Escrow calculates your cash-out refinance payoff
3. Sale proceeds pay off the refinance
4. You keep the remaining equity
5. No prepayment penalty on either loan

After the sale, you have options:

Option A: Keep your purchase loan as-is

• Most people do this
• You’re already in the home with favorable terms
• No action needed

Option B: Refinance your new home

• If rates dropped significantly
• If you want to change loan structure (30-year to 15-year, etc.)
• If you want cash-out for improvements
• Optional, not required

Example: Client bought new home with purchase loan at 6.75%. Kept the refinance on old home at 6.5%. Sold old home eight months later. Paid off the refinance. Rates had dropped to 5.75%, so refinanced the new home. Smart move. But if rates hadn’t dropped? Would’ve kept the purchase loan. No forced refinancing.

The key: No prepayment penalty on either loan. No cross-collateralization between properties. Two separate loans, complete flexibility.

The Qualification Process

What you need:

Credit: 600 minimum. Better credit = better rates. We pull credit, review tradelines, identify any issues upfront. No seasoning requirement on your current home.

Equity: 30% minimum remaining after 70% LTV refinance. We order automated valuation or appraisal on current home to determine exact equity position and available cash.

Income: Standard documentation. W2s, paystubs, tax returns. Self-employed? Two years returns. The refinance qualification is standard. The purchase qualification excludes your old payment from DTI - that’s where the magic happens.

Assets: Enough for reserves on both properties. Typically 6 months PITI reserves total. Varies by loan size and credit profile.

Properties: Both in California. We’re licensed exclusively in California and can’t do out-of-state transactions.

Most people qualify easier with this program than traditional financing because the DTI exclusion gives them more capacity. The equity requirement is the main constraint - need that 30% minimum remaining after the 70% LTV refinance.

Give us a call. We calculate your exact available cash and qualification in about 20 minutes during pre-approval. (510) 589-4096.

Eligible Property Types for Buy Before Sell Programs

The concurrent refinance-purchase program accepts a wider range of property types than conventional financing, including unique properties that other lenders often decline.

Standard property types:

• Single-family homes
• Condominiums (warrantable and non-warrantable)
• Townhomes
• Multi-unit properties (2-4 units)

Specialty property types:

• Co-ops - cooperative housing structures
• Condotels - hotel-condominium hybrid properties
• Large acreage properties - rural homes on significant land
• Hobby farms - residential properties with agricultural elements
• Mixed-use properties - combined residential and commercial spaces

Property restrictions:

Both your departing residence (current home) and your new purchase must be located in California. We’re licensed exclusively in California and cannot arrange financing for out-of-state transactions.

Non-warrantable condos often get declined by conventional lenders due to project issues - high investor concentration, litigation, incomplete construction, or HOA financial problems. The concurrent program accepts these properties, expanding your buying options in California’s complex condo market.

Mixed-use and hobby farm properties combine residential living with commercial or agricultural elements. Traditional lenders typically decline these unique properties. The concurrent program recognizes their value and finances them appropriately.

Risk Management and Considerations

Concurrent financing involves carrying two property obligations temporarily, requiring careful analysis of your financial capacity and market conditions affecting your current home’s sale prospects.

What to consider:

Monthly costs: You’re paying two mortgages until your old home sells. Budget for 3-6 months minimum, even if you think it’ll sell faster. Markets shift. Make sure you can carry both comfortably.

Market timing: California real estate is cyclical. If you’re buying in a rising market and your old home is in a declining market, factor that into your planning. The flexibility helps, but you still need realistic expectations.

Sale preparation: Your old home needs to be marketable. If it needs $50k in repairs to sell at full value, factor those costs into your planning. The concurrent program gives you time to do repairs right, but you still need capital for those repairs.

Backup strategies: What if your home doesn’t sell as quickly as expected? Can you carry both payments for 12 months? 18 months? There’s no balloon forcing you to sell, but you still need contingency planning.

I’ve done hundreds of these transactions. The ones that work best? Clients with strong income, solid equity position, realistic expectations about their old home’s sale timeline, and emergency reserves if the sale takes longer than planned.

The ones that don’t work? Clients stretching to barely qualify, hoping their old home sells in 30 days, no backup plan if it sits. Don’t be that person.

Concurrent Refinance vs Bridge Loans vs Traditional Lenders

Direct comparison:

The concurrent program beats bridge loans on cost and beats traditional lenders on qualification. Only downside versus traditional lenders? You need 30% equity remaining. If you don’t have that equity, traditional lenders might be your only option (with the rental game or sale contingency).

Bridge loans still have their place. Very short timelines (under 60 days), unique property situations, complex scenarios. But for standard buy-before-sell transitions? Concurrent refinance-purchase is usually the smarter move.

Traditional Bridge Loans - The Alternative Option

If the concurrent refinance program doesn’t fit your situation, traditional bridge loans remain available.

Bridge loan structure:

• Short-term financing (6-12 months)
• Secured by your current home
• Funds available for new home purchase
• Balloon payment when your current home sells

When bridge loans make sense:

• Need very short-term funding (under 90 days)
• Don’t have 30% equity for 70% LTV refinance
• Complex property situations
• Already have low-rate mortgage you don’t want to refinance

Bridge loan costs:

• Rates typically 7-10% in current market
• Origination fees 1-3% of loan amount
• Extension fees if original term needs lengthening

Bridge financing allows optimal market timing for your current home sale rather than forcing coordination with your purchase timeline. No different than the concurrent program in that respect - both give you timing flexibility.

The difference is cost and structure. Bridge loans are more expensive but may work when the concurrent program doesn’t fit your equity situation. We evaluate both options during your consultation and recommend the program that makes most sense for your specific circumstances.

Market Timing Strategy - Why Buy Now

Rates are expected to drop through 2025-2026. When rates drop, prices rise. Always been that way.

The math:

• 2024: 7% rates, $850k median California home price
• Rates drop to 5.5%? Same buyer qualifies for $100k-150k more house
• More buyers can afford more house = prices rise
• That $850k house becomes $950k-$1M

Buying before rates drop means locking in today’s lower prices before the next wave of buyers enters the market.

The concurrent refinance program lets you move now without waiting for your current home to sell. By the time rates drop and prices rise, you’re already in your new home at today’s price.

Had clients in 2019 who waited for rates to drop further before buying. Rates did drop in 2020-2021. Prices exploded 20-30%. They ended up paying $200k more for a similar house than if they’d just bought in 2019. Trying to time the bottom cost them six figures.

Can’t predict markets perfectly. But the setup now? Rates near peak, prices stabilized, inventory normalizing. Better to buy before the next surge than wait and hope.

Next Steps for Buy Before You Sell Success

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.