What Are Your Options for Buying a Home Before Selling Your Current One in the Twin Cities
Twin Cities move-up buyers in 2026 have four main paths a contingent offer with a kick-out clause a bridge loan or HELOC to fund the purchase before your sale closes a same-day coordinated closing or a lesser-known strategy where you buy first with a smaller down payment and recast your new mortgage after depositing the sale proceeds Each option has different costs timelines and risk profiles The right choice depends on your equity position your new loan type and how competitive the property you're buying actually is
By Darin Bjerknes | April 28 2026
The hardest part of buying a move-up home in the east metro isn't finding the right property It's figuring out what to do with the one you already own
Do you sell first move twice and buy with the full equity in hand but risk losing the home you want while you wait Or do you lock in the new home first and hope your current one sells before the carrying costs get painful
Most buyers I talk to in Woodbury Stillwater and Lake Elmo are stuck on this question And the standard answer it depends doesn't actually help when you're looking at a listing that's going to have multiple offers by Thursday
Here's the real answer there are four distinct strategies available to move-up buyers in the Twin Cities right now and one of them almost nobody is talking about Let me walk you through all of them
Option 1 The Contingent Offer Lower Risk Less Leverage
A contingent offer means you make an offer on the new home that's conditional on selling your current one first You don't need to qualify for two mortgages at once and you don't need bridge financing The financial risk is low
The trade-off is negotiating power In the spring 2026 east metro market where homes are averaging 43 to 59 days on the market in Woodbury and inventory is up 5.4% from last year sellers are more open to contingencies than they were in 2021 and 2022 A well-structured contingent offer on the right property can absolutely work
The key is the kick-out clause In Minnesota the standard contingency contract includes a kick-out provision that lets the seller continue showing the home and accept backup offers If a non-contingent buyer comes in the original buyer typically has 72 hours to either waive the contingency and proceed or walk away with their earnest money back
This works well when your current home is priced right and will sell fast when the property you're buying has been sitting a while and when you can get your home on the market within 48 hours of submitting the offer It works poorly when you're competing against non-contingent buyers or when you need the full equity from the sale to qualify for the new purchase
Option 2 Bridge Loan or HELOC Buy Non Contingent Before You Sell
If you want to make a clean non-contingent offer on the new home before your current one sells you need financing that lets you access your existing equity first Two main tools here
Bridge Loans
A bridge loan is a short-term loan secured against your current home's equity You use it to fund the down payment on the new home then pay it off when the old home sells No contingency which makes your offer more competitive
The cost is real Bridge loan rates in April 2026 are running 8.5 to 11.5% APR well above standard mortgage rates A $200000 bridge loan at 10% costs roughly $10000 in interest over six months You also need to qualify with both mortgage payments counted against your debt to income ratio simultaneously which requires strong income and a DTI at or below 43%
HELOCs
A HELOC lets you open a revolving line of credit against your current home's equity and draw from it as needed for the down payment HELOC rates in early 2026 averaged around 7.3% well below bridge loan rates and you only pay interest on what you actually draw
There's a critical timing rule most lenders will freeze or cancel a HELOC once your home is listed for sale because the collateral is being transferred You need the HELOC in place before you list Set it up first then put the house on the market
Buy before you sell programs from companies like HomeLight Homeward and Orchard take a similar approach they advance a portion of your equity to fund a non-contingent offer then you sell your home on the open market These are worth comparing if you want the clean offer without managing the loan yourself
Option 3 The Recast Strategy The One Most People Miss
This is the approach that rarely comes up in conversations about move-up timing and it deserves its own section because for equity-rich buyers on a conventional loan it's often the most cost effective path
Here's how it works You buy your new home with a smaller down payment say 10% using a conventional mortgage You make a competitive non-contingent offer because you're not tied to your existing home's sale Your current home sells on the open market ideally for full value Then you take the net proceeds and make a lump sum payment directly toward the principal balance on your new loan After that you ask your lender to recast the mortgage
A recast means the lender re amortizes your remaining balance over the rest of your loan term at your existing interest rate Your monthly payment drops sometimes significantly without a new loan without closing costs and without a credit check The administrative fee is typically $150 to $500
Here's a real numbers example You buy a $900000 home in Stillwater with 10% down Your loan balance starts at $810000 Your current home sells and you net $350000 in proceeds You make that $350000 lump sum payment bringing your balance to $460000 Your lender re amortizes that $460000 over your remaining term at the same rate Your monthly payment drops by several hundred dollars or more depending on your rate and term for a one time fee of a few hundred dollars
Compare that to refinancing which typically runs $8000 to $15000 in closing costs resets your loan term and requires full underwriting and a new appraisal If you already have a good rate recasting preserves it Refinancing replaces it for better or worse depending on where rates are when you pull the trigger
If you put less than 20% down initially and are paying PMI a large enough lump sum payment that pushes you past 20% equity can also eliminate the PMI another cost savings on top of the lower payment
Two caveats to verify before you build a plan around this First recasting is only available on conventional loans Fannie Mae and Freddie Mac backed mortgages FHA VA and USDA loans cannot be recast under government servicing rules Second some lenders impose early payoff penalties if a borrower pays down more than a certain percentage of the loan within the first six months of funding Ask your lender about this before you close on the new home not after Both are quick conversations with your loan officer that take five minutes and save you a nasty surprise
How to Choose A Quick Framework
The contingent offer makes sense when your current home will sell competitively and quickly when you're not up against multiple non-contingent buyers and when you can get your home on the market fast
A bridge loan or HELOC makes sense when you have strong equity and solid financials when you need a non-contingent offer to stay competitive and when you can qualify with both payment obligations on your DTI
The recast strategy is worth exploring when your new loan is conventional when you'll net significant proceeds from the sale when you want to avoid refinancing costs and when you'd rather keep your existing rate than gamble on where rates are when you close the loop
A same day coordinated closing where both transactions close on the same day through the title companies is worth exploring in any scenario where timing lines up Your agent and title company can walk you through whether it's feasible for your specific deal
The honest truth is that most move-up buyers in the east metro have more options than they realize I've watched the recast strategy surface as the right answer for equity rich buyers who'd been told their only choices were sell first and move twice or take out an expensive bridge loan Neither is always true
Every situation has different numbers Running the actual math on your equity your loan type your new purchase price and current rates is the only way to know which path costs least and carries the right risk for you That's the conversation I have with every move up client before we start looking
Note Talk to your lender to confirm your loan type and whether your servicer allows recasting before making any decisions based on this strategy The information here is general guidance not financial or legal advice
Frequently Asked Questions
What is a mortgage recast and how is it different from refinancing
A mortgage recast means you make a large lump sum payment toward your principal then ask your lender to re amortize the remaining balance over the rest of your loan term at your existing interest rate Your monthly payment drops without a new loan new closing costs or a credit check The fee is typically $150 to $500 Refinancing replaces your loan entirely resets the term and involves full closing costs often $8000 to $15000 If you already have a good rate and just want a lower payment after depositing home sale proceeds recasting is almost always the better move
Can I recast my mortgage if I have an FHA or VA loan
No Mortgage recasting is only available on conventional loans backed by Fannie Mae or Freddie Mac FHA VA and USDA loans cannot be recast due to government servicing rules If you have a government backed loan and want to lower your payment after a large lump sum payment refinancing is the only route Confirm your loan type with your servicer before planning around recasting
Should I sell my house before or after buying in the Twin Cities in 2026
It depends on your equity your finances and how competitive the property you're buying is In the spring 2026 east metro market a more balanced market where Woodbury homes are averaging 43 to 59 days on market contingent offers are more viable than they were a few years ago If you're buying in a high demand pocket or competing against multiple buyers a bridge loan HELOC or recast strategy will give you a stronger position Your specific numbers tell the story run them before you decide
What is a kick out clause in Minnesota and how does it protect sellers
A kick out clause is a provision in Minnesota purchase agreements that allows a seller to continue showing their home and accepting backup offers after accepting a contingent offer If a non contingent buyer comes in the seller notifies the original buyer who has a set window typically 72 hours to either waive the contingency and proceed or walk away and receive their earnest money back The kick out clause protects the seller from being locked out of a better deal while waiting on a buyer's home to sell
Do I need to set up a HELOC before I list my home for sale in Minnesota
Yes in most cases Many lenders will freeze or cancel a HELOC once they learn your home is listed for sale because the collateral backing the line is being transferred If you plan to use a HELOC to fund a down payment on your next home before your current home sells open and confirm the line before you list Confirm your specific lender's policy in advance as rules vary by institution
If you're a move up buyer in Woodbury Stillwater Lake Elmo Afton or Cottage Grove and you're trying to figure out the right sequence for your next move let's talk through the numbers before you commit to any one strategy The right path depends on your equity your loan type and your timeline and getting it wrong is expensive
Book a free consultation at https://calendly.com/darintheminnesotan No pressure just a straightforward conversation about your goals and what the market looks like for you right now
About Darin Bjerknes
Darin Bjerknes is a licensed REALTOR with Minnesōtan Brokered by REAL serving the Twin Cities east metro for over 20 years He specializes in move up buyers and the luxury segment across Woodbury Afton Stillwater Cottage Grove Lake Elmo and surrounding Washington Ramsey and Dakota County communities Connect with Darin at darinbjerknes.com or call 612 702 5126
