Buy Before You Sell in Alabama and Florida
There are five ways to buy your next home before you sell your current one. Four of them cost money. We will tell you which one you actually need, including when the answer is none of them.
You found the house. You have not listed yours yet, or you have listed it and it has not gone under contract. Every page you have read so far told you the answer is a bridge loan. A bridge loan is one answer. It is usually not the cheapest one, and a meaningful share of the people who ask us about it did not need it.
So we start somewhere else. Before we price a product, we run your file both ways and find out whether your income already carries both payments. That answer is free, it takes about ten minutes, and it does not touch your credit to start.
Start here: are you selling the old home or keeping it?
This one question splits the whole decision, and most pages never ask it.
If you are selling it, you need to cover the gap between closing on the new house and getting your proceeds from the old one. That is a short-term cash problem. Routes three, four and five below.
If you are keeping it as a rental, you do not have a cash gap at all. You have a qualifying problem, because underwriting has to decide what to do with a second mortgage payment. That is route two, and the rules on it changed nine days ago.
The five ways to buy before you sell, cheapest first
1. Qualify carrying both payments
If your debt-to-income ratio absorbs both mortgages, you make a clean non-contingent offer and you are done. No product, no extra fee, no second closing. This works more often than people expect, particularly when the departing home has a small balance or a low rate.
Cost: nothing. This is the first thing we check on every file, and it is the reason we ask for your numbers before we recommend anything.
2. Keep the old home and count the rent
If you plan to rent the old house out instead of selling it, conventional financing lets the expected rent offset that home's payment when we qualify you for the new one. This is the route that just changed. Details in the next section, because the change is significant and most lenders are still working off the old rule.
Cost: an appraiser's rent report or a market rent study, typically a few hundred dollars, plus reserves.
3. A HELOC opened before you list
A home equity line on your current house gives you the down payment for the new one at a far lower rate than a bridge loan. The catch is timing, and it is a hard catch. Most HELOC lenders will not close a line on a home that is actively listed for sale, and some will freeze a line if the home is listed during the draw period. If a HELOC is your plan, it has to be open before the sign goes in the yard.
Cost: usually little or nothing to open, then interest only on what you draw. This is the route people miss by about three weeks.
4. A bridge loan
A short-term loan against the equity in your current home, used to pay off that mortgage and fund the down payment and closing costs on the new one. It runs six to twelve months and is repaid in full when the old house sells. Market pricing commonly lands somewhere in the 8 to 12 percent range with one to three points in fees, and lenders generally want to see equity, a credit profile starting around 680, and in many cases an active listing.
Cost: real. On a $100,000 bridge held for five months, you are looking at several thousand dollars in interest plus the origination fee. That is the price of a non-contingent offer, and sometimes a non-contingent offer is worth exactly that. Just know the number before you sign, not after.
5. A guaranteed-backup-offer program
Programs from companies like HomeLight, Knock and Orchard combine bridge financing with a promise to buy your house at a preset price if it does not sell inside a window, often 120 days. The certainty is genuine. So is the cost, and the preset backup price is normally set well under what the open market would pay.
Cost: the highest of the five. Worth it if a failed sale would be catastrophic for you. Expensive insurance if it would only be inconvenient.
The Fannie Mae rule that changed on September 2, 2026
If you are keeping your current home and renting it out, this affects your approval right now.
Fannie Mae issued Selling Guide Announcement SEL-2026-08 on September 2, 2026. It rewrote how rental income from a departing residence is documented. Under the old rule you needed an executed lease on the old house before that rent could count. Under the new framework, the lease is out, and the rent has to be supported by the market instead: a full appraisal including market rent, an appraiser's rent report, or a market study built from comparable rentals nearby.
Three things follow from that, and they matter to you:
- The chicken-and-egg problem is gone. You no longer need a tenant signed before you can get credit for the rent. That alone reopens files that were told no earlier this year.
- The math still only offsets. A share of the market rent is counted, the old home's full payment including taxes, insurance and any HOA dues is subtracted, and a positive result cancels that payment out. It does not get added to your income to buy you more house. A negative result counts against you as a monthly obligation.
- Reserves are now part of the framework, not a side item. If you have less than twelve months of documented landlord history, expect to show months of the departing home's payment in reserves on top of anything else the file requires.
Here is the part nobody is telling you. The rule is mandatory on applications dated November 1, 2026 and later, and optional right now. That means two lenders quoting you this week can be working from two different rulebooks and giving you two different approval amounts on identical numbers. Ask any lender you talk to which framework they are underwriting your file on, and ask for the answer in writing. If they do not know what SEL-2026-08 is, that tells you something.
We track both. We will tell you which one gives you the better answer and whether it is worth timing your application around the date.
One myth while we are here: you do not need 20 or 30 percent equity in the departing home for rent to count. That requirement left conventional lending in 2015. If someone quoted it to you this year, they are working from a very old script.
What this looks like in Alabama and Florida specifically
The programs are national. The math is not.
Florida. Insurance is the variable that decides these files. The departing home's full payment includes its insurance premium, and in much of Florida that premium has moved enough that the offset math from two years ago no longer holds. If the house is a condo, the HOA assessment goes into that payment too, and a special assessment landing mid-transaction can move your ratio after you are already under contract. We price the departing home at its current premium and current dues, not last year's.
Alabama. Lower carrying costs on the departing home generally make route one and route two work more often here, which is the good news. The pressure point is appraisal and rent-comparable turn times in the smaller markets. If your file depends on a rent study, that document is now on the critical path to your approval, so it gets ordered in week one rather than week three.
Both states: estimate the payment on both houses before you decide anything. Most people are guessing at the departing home's real monthly cost, and the guess is usually low.
What we do
- We run route one first, every time. If your income carries both payments, we tell you that and we do not sell you a product.
- We price the routes that are actually open to you side by side, in dollars, on one page. Not "it depends."
- We tell you which framework your file is being underwritten on, old rule or SEL-2026-08, and what that does to your number.
- We say no when the answer is no. If a bridge loan would work mechanically but wreck you if the old house sits for six months, we will say so.
If you are still deciding between lenders on this, read how to compare mortgage lenders in Alabama and Florida first. Bridge products are quoted inconsistently and the fee is where the difference hides.
Related programs: conventional loan requirements in Alabama and Florida, get to the closing table with less cash, and lender credits toward your closing costs.
Get your quote
Send us the new purchase price, your current home's balance, payment and estimated value, and your income. We will come back with whether you need a product at all, and if you do, what each open route costs you in dollars.
Get your quote. About ten minutes, no credit pull to start.
Frequently asked questions
Can I make an offer without a home sale contingency if I have not sold yet?
Yes, if you have a route lined up. Routes one through five above all produce a non-contingent offer. What you cannot do is make a non-contingent offer with no plan and hope, because the financing contingency will not save you if the issue is that you never qualified carrying both payments.
How much does a bridge loan cost in Alabama or Florida?
Market pricing commonly runs in the 8 to 12 percent range with one to three points in origination, on a six to twelve month term. Your actual quote depends on your equity, credit and the lender. Ask for the total dollar cost at five months and at ten months, not the rate, because the term is the thing you cannot control.
Do I need to have my current home listed before I can get a bridge loan?
Many bridge lenders require an active listing, and some require an accepted contract. This is the opposite of the HELOC timing rule, where listing the home is what closes the door. If you are considering both, the HELOC has to be handled first.
Can I use the rent from my old house to qualify for the new one?
Usually yes on conventional financing, and the documentation changed on September 2, 2026. A signed lease is no longer the path. The rent now has to be supported by an appraisal with market rent, an appraiser's rent report, or a study of comparable rentals. A share of that rent offsets the old home's payment. It does not add to your income.
Do I need 30 percent equity in my current home to use the rental income?
No. That requirement was retired from conventional lending in 2015. Documentation and landlord history are what determine the outcome now.
What happens if my old house does not sell in time?
On a bridge loan, you are carrying the interest until it does, and most bridge loans have a hard maturity date. Ask before you sign what the extension terms are and what they cost. On a guaranteed-backup-offer program, the program buys it at the preset price. That is the whole thing you are paying for, so make sure you have seen the preset price in writing before you commit.
Is a HELOC really cheaper than a bridge loan?
Generally yes, often by a wide margin, and you only pay interest on what you draw. The reason people end up with a bridge loan anyway is timing. Once the house is listed, most HELOC lenders are out. If you are eight weeks from listing, this is the conversation to have today.
Will this hurt my approval on the new house?
A bridge loan payment and a HELOC payment both count in your ratios, so yes, they consume some of your borrowing capacity. This is exactly why we run route one first. Buying the product you did not need is the most common expensive mistake in this whole category.
Mountain Mortgage, NMLS #2720886. Paul Leara, NMLS #2233772. Equal Housing Lender. Licensed in Alabama and Florida. This page is general information about loan programs and is not a commitment to lend, an offer of credit, or a rate quote. Program terms, rates and guidelines are set by investors and lenders and change without notice. Fannie Mae Selling Guide Announcement SEL-2026-08 is summarized here for general education and is mandatory for loan applications dated November 1, 2026 and later. All loans are subject to underwriting approval. Verify our licensing at NMLS Consumer Access.