How to use equity on first home to buy a second home?
Currently live in the Bay Area have around $400K equity built into our home. But we need to upgrade to a bigger home as our family has expanded and we have outgrown this starter home.
We have enough savings to make a 20% down payment on homes up to $2M, but we don't want to stretch ourselves too thin, so we want to sell off our current home after we move to new home and use the proceeds from that sale to keep our monthly payments reasonable on the new mortgage.
Other than mortgage reamortization, what other options are there for us to use the equity from our selling our current home? I know that interest rates go down when you put more than 20% down, but in our case we will only have 20% at the time of purchase so will qualify for a rate at 20% down, but when we roll the equity from the first home sale later into our new mortgage as part of reamortization, it will only take down the monthly payments, but we will be stuck paying the higher interest rate. The fact that we won't get a better rate later after reamortization is giving me pause. Is there a better way to go about this and qualify for a lower rate that's offered for >20% down payment scenarios to begin with?