Thinking about a bigger home, a shorter commute, or a different neighborhood in Plano but not sure how to use your current equity wisely? You’re not alone. Many North Texas homeowners have built significant equity and want to move up without taking on avoidable risk. In this guide, you’ll see clear paths to sell first or buy first, how cash‑out and recast options work, and real numbers that show what your proceeds can do. Let’s dive in.

Plano prices and equity today

Recent market data shows typical listing and sold prices across Collin County often land in the upper 400s to low 500s, depending on the submarket. You can see this band in the county overview from Realtor.com’s data for Collin County. Plano’s typical home value also trends in the low 500s based on the Zillow Home Value Index. These figures help you estimate likely equity if you purchased several years ago.

• Explore current county pricing context in the Collin County overview on Realtor.com.
• See the typical Plano home value trend on Zillow’s Home Value Index.

The broader DFW market shifted from the extreme competition of 2020–2022 toward a more balanced environment in 2024–2025, which influences days on market and seller expectations. In some neighborhoods you’ll have time to prepare a thoughtful move‑up plan, while in others a non‑contingent offer still wins more often. Review the latest Collin County and DFW notes in this regional market report and forecast, then tailor your strategy to your specific Plano neighborhood.

Four smart ways to use equity

Sell first, then buy

How it works: You list and sell your current Plano home, then use the net proceeds for the down payment and closing costs on your next purchase. This is the cleanest path for many move‑up buyers.

Pros

• Stronger offer with a larger down payment and no sale contingency.
• One mortgage at a time keeps carrying costs lower.
• You may qualify for the federal home sale gain exclusion if you meet the IRS ownership and use tests. Review the rules in IRS Publication 523.

Cons

• You might need temporary housing if closing dates don’t align.
• Moving twice can add hassle and cost.

Timeline tip: A typical contract‑to‑close timeline runs about 30–45 days once you’re under contract, though appraisal or repair items can affect timing.

Buy first with a HELOC or short‑term bridge

How it works: You unlock part of your equity with a home equity line of credit (HELOC) or short‑term bridge loan, then make a non‑contingent offer on the next home. After your current home sells, you pay off or reduce the second‑lien balance.

Pros

• More competitive offers since there’s no sale contingency.
• Flexibility to secure the right home and timeline for your family.

Cons and risks

• You may carry two payments for a period of time.
• HELOCs are often variable rate, which can raise costs if rates rise.
• Bridge loans tend to be more expensive than first mortgages.

If you consider a HELOC, review key mechanics in this HELOC guide. In Texas, homestead and constitutional rules affect how home‑equity products are structured and closed, so start early with a Texas‑licensed lender and review state resources on Texas homestead protections.

Practical tip: Stress‑test your cash flow at today’s rate and at 2–3 percent higher on the HELOC rate. Model two or three months of overlap so you know your budget if your current home takes longer to sell.

Cash‑out refinance

How it works: You replace your existing first mortgage with a larger loan and receive cash at closing. Conventional cash‑out guidelines typically cap the new loan at about 80 percent of the home’s appraised value for a primary residence. You can see this general LTV framework in Freddie Mac’s filings with the SEC. Some investors also apply seasoning rules, which means you may need to have owned the home for a period before a cash‑out is eligible.

• Learn about the 80 percent LTV framework in Freddie Mac’s filing on the SEC site.
• Review an example of investor seasoning policy changes in this cash‑out seasoning bulletin.

Pros

• Access a lump sum of cash in one loan.
• Predictable payment if you choose a fixed‑rate refinance.

Cons

• You may replace a lower existing rate with a higher one.
• Standard refinance closing costs and appraisal timing apply.
• Texas home‑equity rules can affect feasibility and cost.

Recast your mortgage

How it works: After you make a large principal payment, your servicer recalculates your monthly payment based on the same interest rate and remaining term. This is not a refinance, and fees are usually modest. Many conventional loans can be recast, but FHA, VA, and USDA loans generally cannot.

• Get a clear overview of recasting in this Experian explainer.

Pros

• Keep your existing interest rate.
• Lower your monthly payment for a low administrative fee.

Cons

• It does not lower your interest rate or shorten the term.
• It does not give you cash out. It only reduces the payment.

What this means for your offer in Plano

Sellers prefer certainty. In many Plano neighborhoods, offer strength often ranks as follows: cash or large verified funds, then a buyer with conventional financing and no sale contingency, then a buyer with a sale contingency. If you must include a sale contingency, consider tightening contingency windows or offering a seller rent‑back to reduce friction.

Your down payment also affects mortgage insurance. If your move‑up purchase reaches 20 percent down, you can typically avoid private mortgage insurance. If you put less than 20 percent down and have PMI, you have rights to request removal when you reach 80 percent of the original value, and it must fall off automatically at 78 percent or at the loan midpoint. Review the rules in the CFPB’s PMI guidance.

Real numbers: three Plano scenarios

The examples below use round figures aligned with recent Collin County and Plano value ranges. Plug in your actual numbers for precision.

Example A: Sell first, then buy

• Current Plano home value: 500,000 (rounded from recent county medians shown on Realtor.com).
• Current mortgage balance: 300,000.
• Estimated selling costs at 6 percent: 30,000.
• Estimated net proceeds: 500,000 − 300,000 − 30,000 = 170,000.
• Move‑up target price: 700,000.
• 20 percent down on target: 140,000.

Result: You can put 20 percent down, avoid PMI, cover closing costs, and still hold reserves. Your offer is strong because there’s no sale contingency.

Example B: Buy first with a HELOC bridge

• Same current home value and mortgage as above.
• Target purchase: 700,000 with a 20 percent down payment goal of 140,000.
• You open a HELOC for 120,000–140,000 to fund most or all of the down payment.
• After your current home sells, you pay down or pay off the HELOC.

Risk check: If your HELOC rate is variable, model your monthly interest at today’s rate and at 2–3 percent higher. Also plan for two or three months of overlap in payments.

Texas step: Review state homestead protections and consult a Texas‑licensed lender to align your HELOC or equity plan with Texas requirements.

Example C: Recast after sale

• Suppose you close on your new home, then your Plano home sells and nets 120,000.
• You apply the 120,000 as a principal payment on your new conventional mortgage and request a recast.
• Your interest rate and term stay the same, but your monthly payment drops, often for a low recast fee.

This can be attractive if your existing rate is materially lower than today’s refinance rates and your goal is to reduce monthly carrying cost rather than pull cash out. See how recasting works in Experian’s overview.

Step‑by‑step Plano move‑up plan

1. Get your numbers right. Ask for a current CMA on your Plano home so you can estimate realistic net proceeds. Pair that with an early pre‑approval on your target price range.
2. Map your financing path. Decide if you want to sell first or buy first, and ask your lender about HELOC or bridge options, cash‑out seasoning policies, and whether your current loan is recast‑eligible.
3. Review taxes early. Many homeowners qualify for the $250,000 or $500,000 exclusion on home sale gains if they meet the IRS tests. Read IRS Pub. 523 and confirm with a tax advisor.
4. Account for Texas rules. Cash‑out and home‑equity products in Texas follow specific constitutional and homestead protections. Start with a Texas lender and review state homestead resources.
5. Draft a competitive offer. If you must include a sale contingency, consider short windows, a kick‑out clause, or a seller rent‑back to improve acceptance.
6. Stress‑test your plan. If you’re buying first, model two to three months of overlap and a higher HELOC rate scenario so there are no surprises.

Watch‑outs before you choose

• Not all loans can be recast. Conventional loans often can be, but FHA, VA, and USDA usually cannot. Confirm with your servicer.
• HELOCs are often variable rate. If your home takes longer to sell, your carrying cost can rise quickly.
• Texas rules matter. Homestead and constitutional protections change how lenders structure equity loans here. Build in time and ask about specific closing procedures and fee limits.
• Cash‑out reduces remaining equity. If prices dip after you cash out, your equity cushion is thinner. Model downside cases before you choose this path.

Ready to move up with a plan?

You do not have to choose between speed and clarity. With a clear view of your Plano home’s value, the right financing structure, and a timeline that fits your life, you can step into the next home confidently. If you want a local, finance‑savvy partner to help you pressure‑test the numbers and craft a stronger offer, connect with Real Estate Resources for a Free Home Valuation & Financing Review.

FAQs

How much equity do I need to move up in Plano?

• Aim to cover at least the down payment you want on the next home plus estimated selling costs of your current home. In many Collin County scenarios, 15–20 percent down gives you strong offer power and may avoid PMI.

Is a HELOC allowed in Texas for a down payment on my next home?

• Yes, but Texas homestead and constitutional rules govern how home‑equity products are structured and closed. Start early with a Texas‑licensed lender and review state resources on homestead protections.

Will I owe capital gains tax when I sell my Plano home?

• Many owners qualify for the $250,000 (single) or $500,000 (married) exclusion if they meet the ownership and use tests. See details in IRS Publication 523 and confirm with your tax advisor.

Should I sell first or buy first in today’s Plano market?

• Sell‑first keeps costs and risk lower and strengthens your down payment. Buy‑first with a HELOC or bridge can remove a sale contingency and improve offer strength, but plan for temporary overlap and rate risk.

What is a mortgage recast and who qualifies?

• A recast re‑amortizes your existing conventional loan after a large principal payment, lowering your monthly payment while keeping the same rate and term. FHA, VA, and USDA loans generally do not allow recasting.