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Many homeowners want to buy a new home but feel stuck due to low interest rates on their current mortgage or the challenges of buying and selling simultaneously. With record-high home equity (averaging $315,000 as of Q4 2024), the main hurdle is accessing that equity before selling.

Key financing options include:

1.  Home Equity Line of Credit (HELOC):

• Access up to 80% of home equity minus existing loans.
• Interest-only payments on the drawn amount; no principal payments required.
• Ideal for those who can afford carrying two homes temporarily.

2.  Bridge Loan:

• Similar to a HELOC but often easier to qualify for.
• Also uses equity from the current home for a new down payment.

3.  Securities-Based Lending (SBL) Loan:

• Uses non-retirement investments as collateral (stocks, bonds).
• No need to sell assets; interest accrues but payments often optional
• Suitable for investors with $500K+ in marketable securities.

4.  401(k) Loan:

• Borrow up to $50K from your retirement account (if still employed with the plan sponsor).
• Repay through payroll; payments don’t count toward debt ratios.
• No fees typically, but repayment is due immediately if employment ends.

The general rule is that money in 401(K) plans stays there until retirement but the IRS allows "Hardship withdrawals" such as purchase of your primary residence. You can borrow against the account (assuming your employer permits this). 

Each option allows homeowners to become non-contingent buyers, making them more competitive in today’s market.