Planning to move up in 85018 but want to buy your next home before you sell your current one? You are not alone. Many Phoenix owners have strong equity yet do not want the stress of a double move or a contingent offer. In this guide, you will learn how bridge loans and other options work, what they cost, how to time your sale, and how to lower your payment after closing with a recast. Let’s dive in.
What a bridge loan is
A bridge loan is a short-term loan that lets you close on a new home before the proceeds from your current home are available. Terms are typically 3 to 12 months, with interest-only payments and higher rates and fees than a standard mortgage. Lenders look for strong equity and a clear plan to pay the bridge off, usually with sale proceeds.
How it works
- You secure a bridge loan using equity in your current home, sometimes as a second lien.
- You use those funds for the down payment and closing costs on the new purchase.
- After your old home sells, you pay off the bridge loan with the sale proceeds.
Who it fits
- You have significant equity in your 85018 home and stable income.
- You want to make a non-contingent offer to be more competitive.
- You prefer to move once and avoid a temporary rental.
Lenders will consider combined loan-to-value, debt-to-income, credit, and your exit strategy. Many products cap combined loan-to-value around 50 to 80 percent depending on your profile and the product.
Alternatives that get the same result
Bridge financing is a category, not a single product. Here are common structures Phoenix move-up buyers use:
HELOC or home equity loan
A home equity line of credit on your current home can fund your down payment. Payments are often interest-only while the line is outstanding. Opening costs can be lower than a dedicated bridge loan, but the rate is usually variable.
Cash-out refinance or second mortgage
If seasoning and equity allow, a cash-out refi or a second mortgage can provide funds. Underwriting and timelines vary, so confirm speed and closing costs up front.
Sale contingency in your offer
You make your purchase contingent on selling your current home. In competitive Phoenix listings, sellers often prefer non-contingent offers. Some will allow a contingency with a shortened timeline or a kick-out clause.
Delayed financing
You buy with personal funds, then take a cash-out refinance shortly after you close. This depends on lender seasoning and approval rules.
Liquid funds or retirement accounts
You can use liquid assets or margin loans, but be careful with taxes and penalties. Speak with your tax advisor before moving retirement funds.
Costs and cashflow to plan for
Every plan should model a conservative carry period. Here is what to budget:
- Interest: Bridge and HELOC rates are usually higher than a standard first mortgage. Many products have interest-only payments while outstanding.
- Fees: Dedicated bridge loans often charge 1 to 3 percent origination, plus appraisal, title, and closing costs. HELOCs can have lower opening costs but may include annual fees.
- Carry costs: Property taxes, insurance on both homes, utilities, HOA dues, maintenance, and two mortgage payments. Model a worst-case carry of several months.
- Recast fee: If your new loan allows it, recasting after you pay down principal is usually a small flat fee, often in the low hundreds, and can lower your monthly payment without a full refinance.
Recasting your new mortgage
A recast, also called re-amortization, lowers your monthly payment after you make a large principal payment. You keep the same interest rate and the same term. Many conventional fixed-rate loans permit recasts if your servicer allows them and you meet a minimum principal reduction, often several thousand dollars. Availability for FHA, VA, and USDA loans varies by servicer.
A recast is not a cash-out. It is a low-cost way to reduce your payment after you use sale proceeds to pay down your new mortgage.
A realistic 85018 timeline
Phoenix and Maricopa County often move fast, but timing varies by neighborhood, price tier, and season. Use this as a planning guide:
- Bridge or HELOC setup: 2 to 4 weeks for underwriting and closing. Some specialty bridge lenders can be quicker. Get firm timelines in writing.
- Purchase contract to close: 30 to 45 days for a financed purchase. Cash can be shorter.
- Listing to sale: 7 to 90 days depending on pricing and condition. For planning, assume 45 to 90 days in slower cycles.
- Payoff and recording: In Maricopa County, payoffs and lien releases post after closing. The title company coordinates, and county records can take days to a couple of weeks to reflect changes.
- Recast timing: After you apply sale proceeds to the new mortgage, your servicer can process a recast in a few weeks, depending on policy.
How to reduce risk and avoid two moves
Here is a practical checklist our Phoenix move-up clients use:
Before you commit
- Get a written preapproval for your bridge or HELOC based on actual underwriting.
- Confirm your exit plan. Ask for the lender’s policy on term length, extensions, and fees.
- Stress-test your budget for 3 to 6 months of carry costs.
- Keep total combined loan-to-value at a level you can comfortably service.
Prep your listing early
- Pre-inspect and complete minor repairs while you are still living in the home.
- Stage and photograph in advance so you can list quickly after you buy.
- Price for your target time to sell. A realistic price reduces days on market.
- Map out backup plans, such as a rent-back, bridge extension, or keeping the new mortgage without a recast if needed.
During the overlap
- Keep your lender, title company, listing agent, and bridge servicer in sync on payoff instructions and dates.
- Ask your title company to disburse sale proceeds quickly to pay off any bridge or HELOC.
- If using a HELOC, request prompt lien release or reconveyance in Maricopa County.
After your sale
- Decide whether to recast or refinance. If you are happy with the rate on your new loan and your servicer allows it, a recast can be a low-cost way to lower the payment.
- Confirm any waiting periods or documentation your servicer requires.
Example: equity-rich seller
This is an illustrative scenario to show the flow. Your actual numbers and approvals will vary.
- Current home value: about 600,000. Existing mortgage: 150,000. You have strong equity.
- Target purchase: 900,000. Down payment target: 20 percent or 180,000.
- Bridge plan: Open a 200,000 HELOC on the current home to fund the down payment and closing costs. Make interest-only payments while the home is listed.
- Timeline: Buy the new home, list the old home within two weeks, sell in about 45 days, and use the sale proceeds to pay off the HELOC and first mortgage.
- After sale: Apply extra funds to the new mortgage and request a recast to lower the monthly payment without refinancing.
Local contract options to know
- Sale contingency: Makes your purchase contingent on selling your current home. Often less competitive in Phoenix.
- Kick-out clause: A seller may accept your contingent offer but can move on to another buyer if you do not remove your contingency by a deadline.
- Rent-back: After you sell, you lease back for a short period to give yourself more time to move. This adds landlord and tenant terms, which your agent can help manage.
Getting started in 85018
- Meet with a local lender who offers bridge loans or HELOCs and can give you written preapproval and clear timelines.
- Ask your agent for current 85018 metrics by price tier, such as days on market and list-to-sale price patterns, to set realistic timing.
- Build a carry budget that can handle several months.
- Prepare your listing materials now so you can launch fast once your purchase is in escrow.
When you want a seamless move-up with minimal disruption, you need a clear plan, tight coordination, and proactive marketing. The Bray Team pairs neighborhood expertise in 85018 and greater Phoenix with media-forward listing exposure through our SERHANT. alignment. If you are exploring bridge options, we can help you pressure-test the numbers, prepare your listing, and coordinate the payoff and recast steps so you move once and keep momentum.
Request your home valuation with The Bray Team to see how your equity can power your next purchase.
FAQs
Can I buy in Phoenix before I sell my current home?
- Yes. You can use a bridge loan, a HELOC, or other liquidity to buy first. A sale contingency is possible, but it is often less competitive.
How long might I carry both homes in 85018?
- Plan for a bridge term of 3 to 12 months. For the sale, assume 45 to 90 days in slower cycles, plus a cushion for closing and recording.
What credit and equity do lenders want for a bridge?
- Lenders look for strong equity with combined loan-to-value often capped around 50 to 80 percent, solid income, good credit, and a clear exit strategy.
How does a mortgage recast lower my payment after I sell?
- After you pay down principal on your new loan, your servicer can re-amortize the remaining balance for a lower monthly payment. You keep the same rate and term.
What does a recast cost compared to a refinance?
- Many servicers charge a modest flat fee, often in the low hundreds, for a recast. A refinance has full closing costs and changes your rate and term.
What are the biggest risks with bridge loans in Phoenix?
- Your home may take longer to sell, which increases carry costs. There can be appraisal or underwriting issues or recast limitations. Mitigate with conservative pricing, lender commitments, and strong listing prep.
