Can you buy a new home before selling your current one without being stuck with a bigger payment?
Yes. One way is to combine a mortgage that allows recasting with short-term funds to cover the gap until your home sells. In this case study, a couple bought a $2.125M home in Healdsburg with a maximum $897,000 Sonoma County conventional loan, a $500,000 pledged asset line arranged by their financial advisor, and their savings. After their Tiburon condo sells, they plan to pay the line to zero, pay the mortgage down to about $300,000, and recast it. Most jumbo loans don't allow recasting, but our conventional loans do: a $150 fee, and usually about 60 days later the payment is recalculated on the new balance at the same rate and term.
Best for: Buyers who want to move before selling and want a smaller payment once their current home sells
This couple found Sonoma County on a Valentine's Day trip. After falling in love with each other, they fell in love with the place. Weekends turned into cycling, wine tasting and seeking out the best food in wine country, and eventually they were ready to move up full time. There was one catch: they didn't want to sell their Tiburon condo until they had moved out. Here's the plan we built with their financial advisor to let them buy first, sell second, and end up with the payment they wanted.
The Challenge: Buy in Healdsburg Before Selling in Tiburon
The home they chose in Healdsburg was priced at $2,125,000. Selling the condo first would have meant moving twice, or renting in between. Buying first meant covering the down payment without the condo proceeds, and they didn't want to be stuck with a large mortgage payment after the sale either. We talked through the strategy with them and their financial advisor to find a plan that worked on both sides of the move.
Wine Country Property, Residential Loan
Although they were buying in wine country, the property itself was entirely residential. The exceptions were the ag zoning and the neighbors' vines, which are visible on three sides of the property. Because the home didn't need ag income or acreage features to qualify, we didn't need a hobby farm loan or a portfolio loan. That opened the door to a conventional loan, and the recast option that comes with it.
How We Structured It: Conventional Loan + Pledged Asset Line
We used three pieces to cover the $2,125,000 purchase: - **A maximum $897,000 conventional first mortgage, the 2026 high-balance limit in Sonoma County - A $500,000 pledged asset line, identified by their financial advisor, borrowed against their investment portfolio so they didn't have to sell investments - Their savings** for the rest of the down payment and closing costs The plan after the condo sells: use the proceeds to pay the pledged asset line down to $0, then make a large principal payment to bring the mortgage down to a modest balance of about $300,000.
Why the Recast Matters
Most jumbo loans don't allow recasting. If you make a large principal payment on a loan that can't be recast, your balance goes down but your monthly payment stays the same. These buyers wanted to move first, but they didn't want to be stuck with the higher payment. Our conventional loans allow recasting, so they don't need a costly refinance. After the principal payment, the borrower sends a simple request to loan servicing to start the process. The fee is $150, and usually about 60 days later the payment is recalculated on the new balance. They keep the same rate and the same loan term, with a payment sized the way they wanted after the sale.
After the condo sells: three ways to lower the balance
Healdsburg purchase: $897,000 first mortgage paid down to about $300,000
| Jumbo loan, no recast | Refinance | Conventional loan + recast (their plan) | |
|---|---|---|---|
| Monthly payment after paydown | Stays the same | Based on the new loan | Recalculated on the new balance |
| Rate | Same | New rate, could be higher or lower | Same |
| Loan term | Same | New term | Same |
| Cost | None | New closing costs | $150 recast fee |
| Process | None available | New application, underwriting and closing | Simple request to loan servicing |
| Timing | — | Weeks | Usually about 60 days |
The Result: Buy First, Sell, and Get the Payment They Wanted
They moved into Healdsburg without rushing the condo sale or moving twice. Once the condo sells, the pledged asset line gets paid off and the mortgage is recast to about $300,000. They bought first, sold second, and end up with the terms and payment they wanted. If you're weighing a move to wine country, see our Sonoma & Napa mortgage lender page. If you need a different way to bridge the gap, compare a bridge loan.
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Frequently Asked Questions
What is a mortgage recast?
Can you recast a jumbo loan?
Is a recast better than a refinance?
What is a pledged asset line?
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Bottom Line
Buying before you sell takes a plan for both the down payment and the payment you'll have afterward. A conventional loan with a recast option, paired with the right short-term funds, can do both. Run your numbers in the mortgage calculator, then call Lumen Mortgage at 503-966-9255 or email dblackmon@lumenmortgage.com. Licensed in Oregon and California. NMLS #1498678.
