Selling & Buying - HELOC vs Piggyback vs Bridge Loan

[MASTERNC]

I am exploring a move closer to work this year, which would involve buying a new house and selling my first house.  Property values in my area have shot up significantly since I bought, so I am sitting on a decent amount of equity.  My preference would be to know I have a purchase before I put my house on the market, but am also aware sellers do not like financing contingencies.  The community I am in is in high demand and the house is in good condition, so I can likely sell quickly.

I have a good deal of cash but barely enough to put 10% down on my price range plus closing costs, so I need something to tide me over before the sale.  I took out a HELOC a few years ago but only requested $25k (and have about $13k outstanding from a kitchen renovation).  I know I could get an increase but my lender says I have to reapply in order to be considered for one (so it will show as a recent inquiry and/or new account).  I also know there are piggyback loans and bridge loans available but are very hard to find.

My question is which is the better move, especially when trying to qualify for a new mortgage?

[Citylights18]

No doubt about it you have a lot of potential tools here. If you want to look at it from whats the lowest hanging fruit and what is going to get you the most amount of money to work with here would be my recommendations:

-Cash out refiance of your existing property. This is something you can do just to consolidate your existing HELOC debt and take advantage of the current interest rate market. Let's say you get one that is LTV to 80% and have 50,000 cash out of that. It may not be enough for the 10% but its a start.

-Personal line of credit. Wells Fargo as an example will give you up to 100k personal line of credit. Being able to take this much money out assumes that you have good DTI. I will make that assumption here. Create the PLOC with the bank but do not draw from it because of the next step.

-On the existing property HELOC to 100% or a HE Loan to 125% (SDFCU has this). If you draw out of your PLOC first the bank with the home equity product is going to force you to clear it out. The 125% product will give you 100,000 which might not be better than a HELOC depending on how much mone you can get or need.

-Draw out a 401k loan. Here I'm going to make an assumption that you have a standard pre-tax 401k and not a Roth and that you have 100,000 siting in it. You'll have to pay a fee to close but you'll be left with 48k-49k as another funding source and one that doesn't count against your DTI. I wouldn't get it out until right before the close until you know how much you need.

-Now you have potentially 200,000 that you have access to to put down on a property. Let's say that all you need for 10% down is 75,000. Between the 50,000 on the cash out refi and 25k on the 401k you find that its enough. The HELOC and PLOC you didn't have to tap into but at least they are there if you need it.

-Then once you are in the new house 1-2 months take out a HELOC and pay off the 401k loan, money which is interest back to yourself.

Obviously I am promoting the idea of hanging onto your house. With the depreciation, particularly appliances which you can write off in 5 years its worth hanging on to unless it appreciates beyond your cost basis significantly (read 50k+) contributing to a significant capital gains tax. Then its time to unload it.

Other options are working with we buy houses relator that will trade properties with you. You may be looking at an automatic 5% decrease from the listing price as a low ball offer however. But it may yet get the job done.