MORTGAGE BRIDGE LOAN OPTIONS

Home Financing Strategy Comparison
Mortgage Strategy Guide

Home Financing Strategy Comparison

Two powerful pathways to buying your next home — understand the differences, weigh the trade-offs, and make the move with confidence.

Option A: Departing Residence Rental Income Option B: Buy Before You Sell Program
Option A
Departing Residence
Rental Income
Keep your current home as a rental and use projected rent to qualify for your next mortgage.
✓ Non-Contingent Offer Eligible
Option B
Buy Before You Sell
Program
Unlock your current home’s equity to buy first — then sell your old home within a defined window.
✓ Non-Contingent Offer Eligible
Overview
How It Works

Use projected rental income from your current home to qualify for a new mortgage — without selling first.

How It Works

Program unlocks your home equity upfront so you can buy a new home before your current one sells.

Best Suited For

Homeowners who want to keep their current home as a rental property and build long-term wealth.

Best Suited For

Buyers who need to move quickly or compete in a hot market without a sale contingency.

Outcome

You own both homes — one as your primary residence, one as a rental generating monthly income.

Outcome

You buy first, then sell your old home within a defined program window — a clean transition.

Qualification & Income
Income Credit
85% of Projected Market RentRental income is counted toward your qualifying income — even before you have a tenant.
Departure Payment Removed from DTIYour old home’s mortgage is excluded from debt calculations — your new loan qualifies on its own merits.
Equity Required
25–30% equity in your departing home is typically required by lenders to apply rental income.
75–90% of current home value is typically accessible as an equity advance through the program.
Documentation
Signed lease agreement or an appraiser’s rent schedule is required to credit the income.
Program provider handles valuation; minimal documentation needed from the borrower.
Dual Payments Impact
Both mortgage payments still appear as liabilities until rental income is fully documented and credited.
Old mortgage payment is excluded from qualification — resulting in a cleaner DTI ratio.
Costs & Fees
Program / Lender Fee
No Additional Program FeeStandard loan costs only — no special program charges at closing.
Program Fee: 1.0–2.4% of Home ValueFee is assessed at closing in exchange for upfront equity access and streamlined qualification.
Carrying Costs
You are responsible for both mortgage payments until rental income begins and is documented.
The program may cover your old mortgage payments during the transition period — reducing out-of-pocket costs.
Sale Proceeds
Keep full net proceeds if the property eventually sells — or continue to hold it as a long-term rental.
Equity advance is reconciled at closing — final payout depends on the actual sale price of the departing home.
Risk & Flexibility
Market Risk
Rental market softness may reduce the income credit and impact your ability to qualify for the full loan amount.
A lower-than-expected sale price on your departing home reduces the equity payout received at settlement.
Offer Strength
New purchase may still require a contingency or dual-payment qualification in some cases.
Non-contingent offers — significantly stronger and more competitive in fast-moving markets.
Timeline Flexibility
No forced sale deadline — move when your new home closes and manage the rental on your own schedule.
Must sell your departing home within a 90–180 day program window — a defined but manageable timeline.
Long-Term Upside
Retain the rental property for ongoing cash flow, tax advantages, and long-term property appreciation.
Simplifies the transition with no landlord responsibilities after the sale — a truly fresh start.
Option A · Ideal When…

You want to grow a rental portfolio and have strong equity to leverage.

You have 25–30%+ equity, are comfortable managing a rental, can document projected rent income, and want to build long-term wealth through real estate.

Option B · Ideal When…

You need to move fast and want a clean, contingency-free transition.

You need to compete in a hot market, prefer a simpler qualification process, and want to close on your new home before listing the old one — with no landlord duties after.

This comparison is for informational purposes only and does not constitute financial or lending advice. Consult a licensed mortgage professional to evaluate the best option for your individual situation.
March 25, 2026
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Robert Castle
Senior Loan Officer · Excel Financial Group · NMLS #375348
📞 (970) 690-3883 ✉️ castle@excelfg.com
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Excel Financial Group · 2026