Freeing Up Money to Buy in this Crazy Market

We are currently in the process of looking to buy a house in the $1.5M range.  We are fortunate that we have about 15% of this in cash/liquid assets (we refi'd our current mortgage to 30 years to save cash).  You can get preapproved I believe even if you have close to 10% (what we did with our first home through Wells Fargo).  We will have to have a jumbo loan but then when we sell we are planning on refi'ing in the new home. We've had no problem getting pre-approved.  Hope this makes sense and good luck!

We just went through this - a move from a starter home where all three kids were in one room and barely a yard to a much bigger house in Lamorinda. I don't have experience with selling stocks, and we definitely didn't consider liquidating our retirement - the few financial advisors I mentioned the idea to said it was something not to be done. The answer for us, as scary as it was, was that we had to suck it up and sell our first home first and live in a rental while the house was going on the market and for a couple months after the sale (and believe me we put it off for years because of our fear of selling our foothold in this property market and being left high and dry). Yes, there are bridge loans - MPR, our mortgage broker, does them. They are extraordinarily expensive - think $50,000 or so out the door immediately, plus $10,000 or so for each month before you sell your house and pay it off. We thought about going this route but even aside from the cost the big known unknown was how much our house would sell for. It seemed like we were bound on the buy-side to either shoot too low and end up with regrets or shoot too high and end up with bigger regrets. We ended up lucking out and being able to buy contingent on our sale, but the only reason our seller took it seriously was that our house was going on the market 2 days from the date of our offer, with ten days on market, in a very desirable location, so it was all very immediate. And it would have worked out anyway, even if we'd not gotten the house we have, but that took some of the fear off as we went on market. It's definitely a first-first-first-world problem, maybe an "only in the Bay area" problem, but it's scary to have a foot on the housing market and relinquish it without knowing for sure if it will all work to get you in again. The good news is that it probably will work out, especially if you were somewhat flexible about your aspirations (our realtor said you should pick two or three things that you really want about your house, but be flexible about the rest). The market is tightest at the lower end, and somewhat worse in Oakland/Berkeley/El Cerrito than in Lamorinda.

Yes, this is a crazy real estate market, indeed! I would start be making sure you are working with experienced professionals - both realtor and mortgage broker. I would highly recommend Zach Griffin at Guaranteed Rate Affinity, (510)325-1095 for your financing. He has helped me with several loans over the years. He has years of experience, and he is good at coming up with solutions to challenging situations. Good luck with finding your next home! 

We are in a similar situation.  It sounds like a bridge loan might be your best bet.  My realtor recommended Ted Maniatis.  We havent been able to use the loan yet because of our crazy market.  But I appreciate the work he did for us on the front end.  He was good at answering my questions.  https://www.mprfinancial.com/bio.php?b=tmaniatis

We just went through this exact situation, as we have some savings but need the equity from our house to put towards a new house. We are moving from the East Bay to the North Bay, and long story short - we are selling our house to get the equity, moving to a short term rental apartment in the meantime, and then house hunting with the cash in hand to put down on the new house combined with our savings.  I’m in no way an expert on this but will just tell you our experience and thought process in case you find it helpful. 
We tried a down payment bridge loan (you can do that or a bridge loan for the entire price of your home) - it’s extremely expensive (fees, interest and points all added up to a hefty payment) and the monthly interest payment increased our debt to income ratio for the traditional loan we needed to secure (as you don’t pay the bridge loan off until you sell your house) .  So because of all these things we decided against it.  
Another option was taking out a HELOC on our home but it wouldn’t get us as much equity as we will get once we actually sell. 
So, we went the route that I mentioned above - the downside is having to move twice, but besides the annoyance, it was our best route to knowing exactly how much we have to put towards our new house which at the end of the day was most important to us, as we are looking for our forever home. We are in the process of getting our house ready to sell and it will go on the market in early August. 
 

We had a similar circumstance. We ended up relying on loans from extended family to get us through, but our mortgage person (a broker, not at a traditional bank) did make a bridge lender available to us. Just be aware that the bridge is EXPENSIVE -- like six months ago they were asking for 9% interest. When compared with the fact that your 30 year fixed loan is below 3%, its an outrageous amount of money. We also did liquidate some stocks but mainly because we were ready to take the gains and reallocate the assets into another home purchase. 

Talk to a lender to see what your options are. If you have a HELOC, home equity line of credit, you can use that as your down payment. Another option is a bridge loan but only some lenders offer it. Another option which is also the least favorable option I can see you doing is move to a temporary housing while you sell your house and look for a new house. 

Talk to your investment professional. You can margin your non-taxable securities and create your own bridge loan. I would also talk to a mortgage broker before starting to move any money around. You'll need to document everything and create a paper trail. I've used Jill Lyons at CMG Financial personally and I've referred clients to her. (925) 983-3073.

Morsa Aziz is a wonderful loan broker. Kind and smart. Really knows her stuff! You can tell her Amelia recommended her via BPN.  (510) 685-0461

http://www.morsaaziz.com/   http://www.morsaaziz.com/  ≈

If you have substantial enough investments, you can take a margin loan against your investments. This is usually a very low interest rate because the brokerage is essentially loaning you your own money. Reach out to the brokerage that has all of your investments to inquire about this option. The margin loan is how some people manage to make all cash offers without liquidating their investments & incurring capital gains taxes. 

If you have substantial enough equity in your house, you can apply for a HELOC and use that. Note that HELOCs will only loan up to around 75% of the LTV for your house, so as an oversimplified example, if your house is worth $1 million and you owe $250k on your current mortgage, the bank will only give you a HELOC for $500k because $500k + $250k = $750k which is 75% of the $1 million value. HELOCs tend to have pretty low interest rates, but higher rates than a standard mortgage. Any mortgage broker can do these.

A bridge loan is an option, but I believe it has a higher interest rate than either of the above options. 

You should investigate the above three options. You can also consider some combination of the above options with any cash you already have saved. All have some level of risk, so make sure you can get a mortgage to pay back the loans after closing.