Home Buying Story 001 • Buy Before Selling in Denver
This buy before selling plan combined a bridge loan, investment-property HELOC, conventional mortgage, and planned recast so a young family could purchase an approximately $1.3 million Denver home before its current home sold.
See how the bridge loan, investment-property HELOC, conventional mortgage, and planned recast worked together to help this Denver family buy before selling.
This real transaction shows how a carefully coordinated buy before selling strategy can connect equity, income, loan limits, and the eventual sale of a current home. The family and property details have been anonymized, and certain dollar amounts have been rounded for privacy.
Transaction
Move-up home purchase
Buyer profile
Young family and current homeowners
New property
Denver single-family primary residence
Purchase price
Approximately $1.3 million
New first mortgage
Approximately $833,000 conventional 30-year fixed
Equity financing
Bridge loan plus investment-property HELOC
Income profile
Base, rental, and self-employment income
Timeline
Approximately 30 days
Buyer’s real estate agent: Barry Kunselman
The family had outgrown its current home and found the next home it wanted to purchase. Its goal was to buy before selling so it could secure the right Denver property without first completing the sale of the existing primary residence.
They also owned an investment property. Much of the cash available for the new down payment was tied up as equity in those two properties rather than sitting in a checking or investment account. The financing plan therefore needed to unlock that equity, support the new purchase, and leave the family in a strong long-term position after the former home sold.
A buy before selling transaction can require several loans and property payments to be analyzed at the same time. This file also included multiple income sources and a strong emphasis on rate and cost efficiency.
The down-payment resources were largely tied up in the current primary residence and investment property.
Buying first meant underwriting the payment obligations associated with the existing home, investment property, equity financing, and new residence.
The file included base income, rental income, and self-employment income, each with different documentation and calculation rules.
The family wanted more than an approval. It wanted the most efficient combination of loan pricing, costs, monthly obligations, and post-sale flexibility.
A jumbo first mortgage was a legitimate alternative because of the purchase price. It also appeared simpler at first glance because it could have placed more of the financing into a single new loan.
After comparing the available options for this specific file, the jumbo alternatives did not fit as well. Jumbo underwriting can be more restrictive about debt-to-income ratio, reserves, income documentation, and simultaneous property obligations. The pricing and overall cost structure available to this family also did not compare as favorably as the coordinated conventional strategy.
This does not mean a conventional structure is always better than a jumbo loan. It means the best result came from comparing the complete buy before selling transaction rather than choosing a loan category based only on the purchase price.
STEP 1
A bridge loan converted part of the equity in the family’s current primary residence into funds available for the next purchase.
STEP 2
A home equity line of credit on the investment property provided an additional down-payment source.
STEP 3
The combined equity proceeds allowed the family to keep the new first mortgage at the applicable conventional loan limit used for the transaction, approximately $832,750.
STEP 4
The purchase was completed with a conventional 30-year fixed first mortgage while the prior residence remained unsold.
STEP 5
After the former primary residence sells, the plan is to apply a substantial portion of the proceeds to the new first mortgage and request a recast, subject to the loan servicer’s rules and eligibility requirements.
The borrowers did not rely on one simple salary calculation. Their qualifying profile included base employment income, eligible rental income, and self-employment income. Each source had to be documented, calculated, and presented according to the applicable loan guidelines.
We reviewed the income and property obligations as one coordinated file before the purchase moved too far forward. That preparation made it possible to anticipate debt-to-income concerns, document the rental and business income correctly, and avoid treating the bridge loan, HELOC, and new first mortgage as isolated transactions.
The family closed on the new Denver home in approximately 30 days. The appraisals and underwriting process were smooth, even though the transaction involved multiple properties, several mortgage obligations, and three types of qualifying income.
The immediate result was the ability to move into the next home without first completing the sale of the former residence. The longer-term plan is to use the eventual sale proceeds to reduce the new first-mortgage balance and then recast the payment, subject to the servicer’s requirements.
The buy before selling strategy gave the family flexibility at the time of purchase while preserving a path toward a more efficient monthly payment after the prior home sells.
The simplest-looking loan on closing day is not always the strategy that creates the best ending position. For buyers considering a buy before selling plan, additional coordination can sometimes use equity from more than one property, improve the first-mortgage structure, and create a deliberate post-sale path.
Possibly. Approval depends on income, credit, reserves, available equity, the payments that must be counted, the expected sale plan, the new property, and the guidelines of each loan involved.
In this transaction, the family had usable equity in two different properties. Coordinating both sources produced the down payment needed to keep the new first mortgage at the targeted conventional loan amount.
A recast generally applies a large principal reduction and recalculates the required monthly principal-and-interest payment over the remaining loan term. It normally does not change the interest rate. Recasts are not automatic, and availability, fees, timing, and minimum principal-reduction requirements vary by servicer and loan.
They may be used when each source is eligible and adequately documented. The calculation can depend on tax returns, leases, property history, business history, expenses, ownership percentage, and the applicable loan program.
Important considerations include carrying several payments, bridge-loan and HELOC costs, possible variable HELOC rates, reserve requirements, uncertainty about the timing and net proceeds of the existing-home sale, and whether the new loan will be eligible for the planned recast.
Real estate representation: Barry Kunselman helped the family navigate the purchase of the new Denver home.
Mortgage strategy and coordination: Milestone Home Mortgage coordinated the bridge loan, investment-property HELOC, conventional purchase mortgage, income analysis, and planned post-sale recast strategy.
This story is based on a real transaction but has been anonymized for privacy. Certain amounts have been rounded, and unnecessary identifying details have been omitted. It is an educational example, not a promise that another borrower will receive the same approval, pricing, structure, timeline, or outcome.
This information is for general educational purposes and is not a rate quote, approval, commitment to lend, financial advice, tax advice, legal advice, investment advice, or real estate advice. Loan programs, rates, costs, guidelines, property requirements, loan limits, recast policies, and eligibility vary and can change. Bridge loans and home equity lines can involve additional fees, liens, payment obligations, and interest-rate risk. All financing is subject to borrower, credit, income, asset, property, lender, and investor approval. Not all applicants or properties will qualify.
Updated August 31, 2026
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