Is house swapping possible?
You would have to find someone in the other state who wanted to swap.  This is conceivable but difficult if you want the houses to be the same value.  How do you find the one person who lives in the right place now and wants to move to the right area?   The normal way this situation is handled is to simply put your house on the market.  At the same time, you find a new house in the new location.  You arrange for a new mortgage for the new house and make purchase contingent on selling the old house.  Your buyer pays off your mortgage and gives you a bit left over that you use as a downpayment on the new house.   Note that you take a loss on closing costs when you do this.  This is why if you are in the position where you move frequently, you may be better off renting.   Sometimes an employer will help with this, paying for a long term hotel or short term rental.  This can give you more room to sell and buy the houses.   If you have to move right now, immediately, not in a few months when your housing situation is fixed, consider double renting.  You rent out your mortgaged house to someone and pay rent on a new place.  You may put some of your stuff in storage until you get into your permanent place.   The downside is that it can be harder to sell a house with a tenant until you are close to the end of the lease.  And of course, you are probably not in the best position to get or pay good rent.  Your situation restricts your options.  You might get stuck in this situation for a year so as to get the time that you need to line up a buyer.   Of course, you may get lucky and find someone who wants your old house as an investment property.  Such a person won't be bothered by a tenant.  But they usually want a good price.  After all, they want to make money off it.   There are those operations that advertise that they buy ugly houses.  They want a good deal.  You'll probably take a bath.  But they can buy quickly, so you can move on quickly.  No waiting until they find a buyer.   And I'm not saying that you can't do a swap like you want.  I'm just saying that you may find it difficult to find a swapping partner.  Perhaps an investment person would be up for it.  They take your house in trade for their house, letting you stay in their house until they can fix up your old house and either rent it or sell it.  The problem is that it may be hard to find such an investor who can handle a house where you are and has a house where you need to be.   I don't have a good suggestion for finding a swapping partner other than calling a lot of realtors and asking for suggestions.  Maybe a bit of online checking for properties where the owner's business is managing the sale. Another possibility that you might consider is to find a renter for your current place and move to your destination. If you have a lease for your renter, your mortgage company can consider that as income for approving the purchase of a new house. I did something similar when I purchased my current home, but I was also able to get approved without selling or renting the old place. There's no reason that someone couldn't create a house swapping site for longer-term than a week. It may not initially have as much demand as a 1 week swap, but there are no such existing services that I am aware of.
What you are describing is called a Home Equity Line of Credit (HELOC). While the strategy you are describing is not impossible it would raise the amount of debt in your name and reduce your borrowing potential. A recent HELOC used to finance the down payment on a second property risks sending a signal of bad financial position to credit analysts and may further reduce your chances to obtain the credit approval. I don't believe you can do that. From the IRS: Finally, certain types of property are specifically excluded from Section 1031 treatment. Section 1031 does not apply to exchanges of: I highlighted the relevant items for emphasis. I could be wrong, but I doubt you're going to be able to roll the current mortgage into a new one. The problem is that the bank is going to require that the new loan is fully collateralized by the new house.  So the only way that you can ensure that is if you can construct the house cheaply enough that the difference between the construction cost and the end market value is enough to cover the current loan AND keep the loan-to-value (LTV) low enough that the bank is secured. So say you currently owe $40k on your mortgage, and you want to build a house that will be worth $200k. In order to avoid PMI, you're going to have to have an LTV of 80% or less, which means that you can spend no more than $160k to build the house.  If you want to roll the existing loan in, now you have to build for less than $120k, and there's no way that you can build a $200k house for $120k unless you live in an area with very high land value and hire the builders directly (and even then it may not be possible). Otherwise you're going to have to make up the difference in cash. When you tear down a house, you are essentially throwing away the value of the house - when you have a mortgage on the house, you throw away that value plus you still owe the money, which is a difficult hole to climb out of. A better solution might be to try and sell the house as-is, perhaps to someone else who can tear down the house and rebuild with cash. If that is not a viable option (or you don't want to move) then you might consider a home equity loan to renovate parts of the house, provided that they increase the market value enough to justify the cost (e.g. modernize the kitchen, add on a room, remodel bathrooms, etc. So it all depends on what the house is worth today as-is, how much it will cost you to rebuild, and what the value of the new house will be. Wrong way round. Transitional arrangements are non-binding guidelines that the lenders can observe if they choose to. The borrower - like your friend - doesn't  get to choose whether to use them or not. Your friend obviously can't afford the property, so if you do this, all I can say is congratulations on buying your new house, and I hope you got a deal on the mortgage. "I have a friend who had went on a seminar with FortuneBuilders (the company that has Than Merrill as CEO). He told me that one of the things taught in that seminar was how to find funding for the property that you want to flip. One of the things he mentioned was that there are so-called ""hard money"" lenders who are willing to lend you the money for the property in exchange for getting their name on the property title. Last time I checked it looked like here in Florida we had at least Bridgewell Capital and Fairview Commercial Lending that were in that business. These hard money lenders get their investment back when the house is sold. So there is some underlying expectation that the house can be sold with some profit (to reimburse both the lender and you for your work). That friend of mine did tell me that he had flipped a house once but that he did not receive the funding to that from a lender but from an in-law, however it was through a similar arrangement." Technically, no. Only if used for improvement or expansion to the original property. I converted my downstairs of my house to a suite with an eye to AirBNBing.  But I also make money renting it out (I live in a resort town with ridiculously high rents).  So far, I haven't tried AirBNB because renting it out on yearly contracts seems like less total effort and I make 1100 gross per month (net is probably closer to ~800)  I have no idea if I could make more on AirBNB.  Maybe one of these years I'll try it for a few months. This is of course a perfectly normal thing to happen. People trade up to a bigger house every day. When you've found a bigger house you want to move to and a buyer for your existing one, you arrange 'closing dates' for both i.e. the date on which the sale actually happens. Usually you make them very close, either on the same day or with an overlap of a few weeks. You use the equity (i.e. the difference between the house value and the mortgage) in the old house as the down payment on the new house. You can't of course use the part of the old house that is mortgaged. If the day you buy the new and sell the old is the same, your banks and lawyers do everything for you on that day. If there is an overlap then you need something called 'bridge financing' to cover the period when you own two houses. Banks are used to doing this, and it's not really that expensive when you take into account all the other costs of moving house. Talk to them for details. As a side note, it is generally reckoned not to be worth buying a house if you only intended to live there one or two years. The costs involved in the process of buying, selling and moving usually outweigh any gains in house value. You may find yourself with a higher down payment if you rent for a year or two and save up a down payment for your 'bigger' house instead. Maybe a larger house/apartment Your only option might be finding a seller-financed property with a motivated seller who is willing to take the risk of loaning you money. However, be prepared to pay a hefty rate on that loan if you can even pull it off. You're talking about porting your mortgage, which may be possible if your mortgage was portable to start with, or if your bank subsequently allows it. Note that although porting a mortgage involves keeping most of the original terms and conditions, the process is still much like applying for a new mortgage, including any lending requirements. Here's an article on the subject. EDIT: In response to OP's comment below: What will happen to the first property if I don't sell it? Because porting a mortgage is treated as if you were closing one mortgage and opening a new one, this means that you would need to pay off the first mortgage. Typically this would be done by selling the first property at the same time that you buy the second one. However, if you're not doing this, you'll need to raise funds another way, which could include opening a new mortgage on the first property (of course, if you're doing that, then there would have to be a good reason for porting the original mortgage; otherwise you might as well leave it where it is, and open a new mortgage on the second property instead). Does the article apply the to USA too? That article (and indeed this answer) are based on the situation in the UK. However, they appear to exist in the US too, though are rarer than in the UK. "JoeTaxpayer's answer mentions using a third ""house"" account. In my comment on his answer, I mentioned that you could simply use a bookkeeping account to track this instead of the overhead of an extra real bank account. Here's the detail of what I think will work for you. If you use a tool like gnucash (probably also possible in quicken, or if you use paper tracking, etc), create an account called ""Shared Expenses"". Create two sub accounts under that called ""his"" and ""hers"". (I'm assuming you'll have your other accounts tracked in the software as well.) I haven't fully tested this approach, so you may have to tweak it a little bit to get exactly what you want. When she pays the rent, record two transactions: When you pay the electric bill, record two transactions: Then you can see at a glance whether the balances on ""his"" and ""hers"" match." I have a CPA. They said that it isn't possible. However, I've seen on message boards that it indeed IS possible, multiple times. I'll likely reach out to another CPA. However, I am interested to hear from somebody who has done this before, so that I at least have a name or defined process for what I'm attempting to do. It would depend on how those banks behaved in the market. Seven can own all.the houses and there would be no problem, it only becomes illegal if those banks then collude to fix prices (or some other monopolostic practice). It's important to remember that monopolies are not illegal per se. Very rarely would an investor be happy with a 4% yield independent of anything else that might happen in the future. For example, if in 3 years for some reason or other inflation explodes and 30 year bond yields go up to 15% across the board, they would be kicking themselves for having locked it up for 30 years at 4%. However, if instead of doing that the investor put their money in a 3 year bond at 3% say, they would have the opportunity to reinvest in the new rate environment, which might offer higher or lower yields. This eventually leads fixed income investors to have a bond portfolio in which they manage the average maturity of their bond portfolio to be somewhere between the two extremes of investing it all in super short term/ low yield money market rates vs. super long term bonds. As they constantly monitor and manage their maturing investments, it inevitably leads them to managing interest rate risk as they decide where to reinvest their incremental coupons by looking at the shape of the yield curve at the time and determining what kind of risk/reward tradeoffs they would have to make.