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Bridge or HELOC

Bridge loan or home-equity line? Buying before you sell

The short answer

To buy before you sell you need the down payment before the sale money arrives. A home-equity line borrows against your current home, usually at a variable rate; a bridge loan is short-term financing repaid from the sale. Either way, your new lender may count both house payments unless your sale is under contract with the buyer’s financing contingencies cleared.

Last checked October 20, 2026

Neighborhood street with houses and bare trees, a fire hydrant in front, and snow-dusted mountains on the horizon
Photo: Pete Seabolt, CC BY 3.0

Buying your next home before the old one sells needs cash for the down payment before the sale money arrives. The two common sources are a home-equity line of credit on the home you own and a bridge loan. Here is how they compare, and the lender rule that affects both.

A home-equity line (HELOC)

The CFPB describes a HELOC as working much like a credit card, borrowing against your equity, usually at an adjustable rate. You draw what you need for the down payment and repay it from the sale. Read the agreement: depending on its terms, the whole balance may be due at once when the draw period ends. Ask your lender whether it will open a line on a home that is already listed; if not, open it first.

A bridge loan

A bridge loan is short-term financing secured by your current home, meant to be repaid when it sells. Costs and terms vary widely by lender, so get the rate, fees, term and the payment schedule in writing and compare them with a HELOC quote side by side.

The rule that affects both

Your new lender has to decide whether you can afford two homes. Fannie Mae’s rules say that if your current home will not close before the new loan, both payments are counted unless the lender has the signed sales contract and the buyer’s financing contingencies are cleared. That can shrink what you qualify for until your sale is firm.

Or keep the old home as a rental

If you would rather keep the old home, a lender may count 75 percent of its market rent and ask for six months of reserves if you are new to being a landlord. Check the two-of-five-year rule before you sell it later.

Run your own numbers

The bridge-gap calculator shows how much you would need to bridge if you buy first, including Georgia’s intangible tax on the new loan. Then compare the seven strategies before you choose.

Ready to make the move?

One agent for both sides of your move.

Gold Peach Realty is the North Georgia brokerage behind this guide, based in Dahlonega. Our agents can price your home, line up the sale and the purchase, coordinate both closings and show you homes that fit what comes next.

Visit Gold Peach Realty Call Gold Peach Realty (770) 283-1223

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