A family in Colorado Springs wasn’t planning to move. Then the right home came up at the right price. They had a lot of equity locked in their current house — but no buyer yet, no sale under contract, and no plan. Most people in that spot either wait or write a contingent offer. Both options cost you the deal in a competitive market. We did neither.
We took this file from application to clear to close on a jumbo purchase. Their current home went on the market one week after they signed the new purchase contract. The closing on the new home is in one week — and the old house still hasn’t sold. That is the point. The appraisal was the only thing that slowed us down. Here is how the structure works.
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The Setup: An Unplanned Purchase with Equity Stuck in the Wrong House
Here is the actual situation, anonymized:
- Family not actively looking — opportunity came up.
- Current home has significant equity. Not liquid yet.
- New purchase is jumbo — above the $832,750 conforming loan limit for El Paso County.
- No buyer for the current home at time of application.
- Family did not want a contingent offer — feared losing the deal.
- Did not want a same-day back-to-back closing either — too much timing risk.
- Application submitted. Purchase contract accepted within days.
- Current home listed one week after the new contract was signed.
- CTC issued. Purchase closing one week out.
- Current home still on the market. Sale pending — not yet closed.
The real issue was not credit, income, or assets. The issue was timing. They had the money — it just wasn’t in their bank account yet. The right structure makes that workable.
Why a Contingent Offer or Back-to-Back Closing Wasn’t the Move
A contingent offer says: “I will buy your house, but only if mine sells first.” Sellers with other offers don’t wait for that. In a market where homes sit longer than they did between 2020 and 2022, sellers are still comparing offers side by side — and a contingency is a risk most won’t take when they have alternatives. You lose the deal or you end up negotiating from a weak position.
A back-to-back closing tries to solve this by lining up both closings on the same day. The problem: one deal falling apart or running late can collapse the other. You are depending on two separate title companies, two separate lenders, and two separate buyers all executing perfectly on the same day. That is a lot of moving pieces under pressure.
The hard rule most buyers don’t know:
You don’t need to sell before you buy. You need the right loan structure. A recast, a bridge loan, or a deferred-payment product can solve the timing problem without putting your purchase at risk.
The Fix: Jumbo Purchase with a Free Recast Built In
We structured this on a jumbo loan product that allows a free recast after closing, with no limit on how many times it can be used. The buyer puts the minimum down to close now — without waiting on the sale of the current home. Once that home sells, they take the net proceeds and apply them to the new loan balance as a lump sum. Then the recast kicks in.
A recast is not the same as an extra principal payment. A standard principal payment reduces your balance — but the scheduled monthly payment stays the same. A recast reduces your balance and recalculates your payment based on that new lower balance, keeping the same rate and remaining loan term. The result: the payment they’ll carry over the full life of the loan reflects the amount they always planned to borrow — just without the proceeds in hand at closing.
One timing note worth knowing: a recast that reduces the balance by more than 30% is not allowed in the first six months after closing. In most buy-before-you-sell scenarios, the current home sells well within that window — so confirm your timeline before structuring the deal this way. After the six-month mark, there is no restriction on the size of the reduction.
What this jumbo file required
Loan Amount
Above the El Paso County conforming loan limit of $832,750 — jumbo territory. Minimum loan amount is $832,751 for this county.
Credit Score
Minimum 680 mid-score on this product tier. Higher scores unlock higher LTV and lower DTI requirements. AUS approval required — DU or LPA.
DTI
Maximum 43% DTI. This calculation includes the new jumbo payment and the existing housing expense while the current home is still on the market — both payments count.
Recast Terms
Allowed at no charge. No limit on number of recasts. Lump-sum payment reduces the balance; payment is recalculated over the remaining term at the same rate. Recast reducing balance more than 30% not allowed in the first six months.
Max LTV
Up to 80% LTV for owner-occupied purchases at the 680 credit score tier. No mortgage insurance required on this product.
Max Loan Amount
Up to $5,000,000 on this product. Purchase and rate/term refinance eligible. Loans over $3M require investor eligibility review prior to approval.
Requirements based on PRMG Gold Fully Amortizing Jumbo Product Profile (05/14/2026) and PRMG Jumbo Product Comparison Matrix (05/18/2026). Subject to change. See product profile for complete guidelines. Recast allowed at no charge with no limit on number of uses; recast reducing balance by more than 30% not permitted within first six months of closing. Loans above $3,000,000 require investor eligibility review. Not all borrowers will qualify.
How We Got to CTC — and What the Appraisal Cost Us
A fast jumbo close requires the file to be clean going in, the structure to be set on day one, and no surprises in the docs. On this file, three of those four boxes were checked immediately. The appraisal was the one variable we couldn’t compress. Here is what the process looked like.
Structure first, application second
Before we took the application, we confirmed the product, the recast terms, and the DTI scenario — including carrying both payments simultaneously. No surprises mid-file.
Full documentation upfront
AUS jumbo means the underwriter sees everything. Tax returns, pay stubs, asset statements, full picture of the current property — all in on day one. No drip feeding docs.
The appraisal is the one thing you can’t rush.
On a jumbo, a full appraisal is required — no waivers. AMC scheduling, appraiser availability, and turn time are outside your control. Order it the day the purchase contract is signed. Any day you wait is a day added to your timeline you cannot get back. On this file, that was the only variable that added time. Everything else was done.
DTI modeled with both payments in the ratio
The current home was not yet sold. That means the existing housing payment stayed in the DTI calculation. We confirmed the ratio cleared 43% before the file went to underwriting.
Recast plan documented in the loan file
The buyer knew the plan going in. When the current home sells, take the net proceeds, apply them to the new loan balance, request the recast. Payment recalculates based on the lower balance across the remaining term — same rate, no fee, no new loan.
Other Ways to Solve the Same Problem
The recast is one tool. It works well when the buyer has strong income to carry both payments short-term and expects the current home to sell within a predictable window. But there are other structures worth knowing.
If the equity in the current home is the problem — meaning the buyer needs that cash for the down payment on the new home — a HELOC on the existing property is worth looking at first. Pull the equity out as a line of credit before listing the house, use it for the down payment or to reduce the jumbo loan amount, then pay it off when the home sells. That path can reduce or eliminate the gap between what the buyer needs at closing and what they have available.
A bridge loan is another option — short-term financing that covers the period between the two closings. And a Power Buyer program can provide temporary deferred-payment financing on the new home for up to 12 months while the current home sells. Each has its own qualification requirements. The right path depends on the income, the equity position, the loan amount, and how quickly the current home is expected to sell.
The temporary payment reality:
The buyer closes at a higher loan amount than they plan to carry long term. That means the payment is larger than their target until the old house sells. This is a qualification question your loan officer needs to work through before structuring the deal — not after. If the income doesn’t support both payments simultaneously, the recast path won’t qualify.
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Frequently Asked Questions
What is a mortgage recast?
A mortgage recast is when you make a lump-sum payment toward your loan balance and the lender recalculates your monthly payment based on that new lower balance. The rate and remaining loan term stay the same. Only the payment changes. This is different from a regular principal payment, which reduces your balance but does not change the scheduled payment amount.
Can I buy a home before selling my current house?
Yes. The key is qualifying with both payments in the debt-to-income ratio. If your income supports carrying both housing payments at the same time, you can close on the new home without a contingency and without a back-to-back closing. A jumbo product with a recast option lets you apply the sale proceeds after closing to bring the payment down to where you planned.
Is there a limit on how many times I can recast a jumbo loan?
On this product, no. There is no limit on the number of recasts. There is one timing restriction: a recast that reduces the loan balance by more than 30% is not allowed within the first six months after closing. After the six-month mark, there is no restriction on the size of the reduction and no fee for any recast.
How is a recast different from a refinance?
A refinance replaces your loan with a new one — new rate, new term, new closing costs. A recast keeps your existing loan intact and recalculates the payment based on a reduced balance. There are no closing costs on a recast, and your rate does not change. If your current rate is favorable, a recast lets you lower your payment without giving up that rate.
Can I use a HELOC on my current home to buy before I sell?
Yes, and this is often the cleanest path when the issue is down payment access rather than income. A HELOC on your existing property lets you pull equity out before you list the home. You use those funds for the down payment or to reduce the jumbo loan amount on the new purchase. When the current home sells, you pay off the HELOC with the proceeds. This avoids carrying a larger jumbo payment altogether.
Why not just write a contingent offer?
A contingent offer tells the seller you will only buy if your current home sells first. In a market where sellers are comparing multiple offers, a contingency is a risk they may not accept — especially if other buyers can close without one. You either lose the deal or negotiate from a weaker position. The recast strategy lets you make a clean, non-contingent offer.
What other options exist if I want to buy before I sell?
Three main options beyond the recast: a HELOC on the existing property (pull equity now, use it for the new purchase down payment, pay it off at sale), a bridge loan (short-term financing covering the gap between the two closings), or a Power Buyer program (temporary deferred-payment financing on the new home for up to 12 months while the current home sells). Each has different qualification requirements and works better in different scenarios.
How long does a jumbo loan take to close?
On a jumbo with AUS underwriting, the timeline depends heavily on the appraisal. Everything else — docs, underwriting, conditions — can move fast when the file is clean from day one. The appraisal is the one variable you cannot compress: AMC scheduling and appraiser availability are outside your control. The more common total range is 21 to 30 days. Order the appraisal the day the purchase contract is signed.
More on Jumbo Loans and Loan Strategy
Jumbo Loan Options
The full jumbo lineup — loan amounts, LTV tiers, credit score requirements, and which products allow a recast.
HELOC Options
Pull equity from your current home before you list it. Use it for the down payment on the new purchase, then pay it off at sale.
Closed-End Second Mortgage
Fixed-rate, fixed-term second mortgage for borrowers who need equity access without refinancing the first.
VA Loan Options
Active duty, veteran, or surviving spouse? VA loans have their own timing solutions for buy-sell scenarios.
Working through a buy-sell timing situation? We can map out the options based on your numbers.
Written by J.D. Peck
Area Manager / Mortgage Loan Originator at Paramount Residential Mortgage Group, Inc. Lending in 49 states.
NMLS #314883 · PRMG NMLS #75243 · Published June 2026
