A bridge loan lets you tap the equity in your current home to buy your next one before you sell. It can strengthen your offer and simplify your move, but it can also stack three payments on your budget at once. Here is how to weigh the trade-offs for your situation.
Every borrower situation is different, but there is one situation I hear about constantly: you found the next house before anybody has made an offer on your current one. The money you need for the down payment is real. It's just locked inside the walls of the home you haven't sold yet. A bridge loan exists for exactly that gap.
A bridge loan is a short-term loan secured by the equity in your current home. You borrow against what you own today, use the cash for the down payment and closing costs on the new home, and then pay the bridge loan off when your old home sells. Lenders and loan officers also call it a swing loan, gap financing, or interim financing. Different names, same tool.
Federal lending rules treat these loans as a distinct category. The Consumer Financial Protection Bureau's Regulation Z defines a temporary or bridge loan as one with a term of 12 months or less, such as a loan to finance the purchase of a new dwelling where the consumer plans to sell a current dwelling within 12 months. That 12-month window tells you a lot about how the product is built. It's not permanent financing, and no one involved expects it to be. It's a timing tool.
So the first question is not whether bridge loans are good or bad. The question is whether your situation is the one they were built for. You need meaningful equity in your current home. You need a house that will realistically sell inside the loan term. And you need enough income to carry more than one payment for a stretch of months. If any one of those three legs is shaky, the whole stool wobbles, and there are better tools for the job. We'll get to those alternatives later in this article, because for a lot of borrowers the alternative is actually the answer. And if you're not sure where you stand on those three legs, that's a five-minute conversation with a loan officer at AmeriSave, not a leap of faith.
Let's say it's a move-up purchase. You own a home worth $400,000 with $220,000 left on the mortgage, which puts your equity at $180,000. You're under contract on a $500,000 home and want to put 20% down, or $100,000, plus closing costs. Your savings account doesn't have $100,000 sitting in it. Your house does. A bridge loan converts a slice of that $180,000 into cash you can bring to the closing table.
Bridge loans come in two basic structures, and the structure changes your monthly math. The first structure is a second lien. The bridge lender leaves your existing mortgage alone and places a second loan behind it. You keep paying the old mortgage, you pay the bridge loan, and once the new purchase closes you pay the new mortgage too. Three payments. The second structure pays off your existing mortgage entirely and replaces it with one larger bridge loan. That drops you to two payments, but the bridge balance is much bigger, and the whole thing still comes due when the old house sells.
Timing is the reason people accept those trade-offs. A conventional purchase mortgage at AmeriSave or any other lender runs on a standard underwriting clock, but a bridge loan against a home you already own can often fund on a faster track because the collateral, your existing house, is already sitting there with a known value and a known mortgage balance.
Repayment usually looks different from a regular mortgage as well. Many bridge loans are structured as interest-only, meaning your monthly payment covers the interest charge and nothing else, with the full principal due in one balloon payment when the home sells or the term ends. Some lenders let you defer payments entirely until the sale. Either way, the loan doesn't slowly amortize down the way a 30-year mortgage does. The exit plan is the sale of your house, and everything about the loan is built around that.
Which structure fits you comes down to your existing rate and your monthly comfort. If your current mortgage carries a rate well below today's market, the second-lien structure protects it, because paying off a cheap mortgage with expensive bridge money just to reduce your payment count is trading dollars for tidiness. If your existing rate is already high, or the old payment is large enough that carrying it plus a bridge would strain the budget, the payoff structure can lower the monthly total even though the bridge balance grows. Ask the lender to show you both versions on paper with your actual balances. Ten minutes of side-by-side math settles a question that borrowers otherwise argue about with themselves for weeks.
One structural rule worth knowing before you shop: if your new purchase loan will be a conventional mortgage sold to Fannie Mae, the bridge loan cannot be cross-collateralized against the new property. Fannie Mae's Selling Guide spells this out in its bridge and swing loan section. The bridge lender secures its loan with your current home, the purchase lender secures its loan with the new home, and no single loan can grab both houses as collateral. It protects you from one default putting two roofs at risk.
When a bridge loan fits, it fits because of what it does to your position as a buyer and to the logistics of your move. Here are the advantages that actually matter, not the brochure version.
A sale contingency tells the seller your purchase only happens if your current home sells first. Sellers don't love that. In a market with limited inventory, they don't have to accept it. The National Association of REALTORS® reported a 4.5-month supply of unsold homes in its most recent monthly existing-home sales data, and in plenty of neighborhoods the practical supply is tighter than that number suggests. When several buyers want the same house, the offer with no strings attached usually wins, even at the same price.
My wife is a real estate agent, and I've watched this play out from her side of the transaction plenty of times. When she presents offers to a seller, a clean, non-contingent offer changes the entire conversation. A bridge loan gives you the cash to make that offer. You're not asking the seller to bet on your buyer showing up. You already have the funds.
Selling and buying on the same day is the hardest transaction sequence in residential real estate. Two closings, two lender clocks, moving trucks staged in a parking lot, and one delay anywhere breaks everything downstream. A bridge loan uncouples the two transactions. You close on the new home, move on your own schedule, and then sell the old home empty, cleaned, and staged.
There is a money angle hiding inside that convenience. An empty, well-presented home frequently shows better and sells faster than one you're still living in with kids, pets, and a garage full of half-packed boxes. NAR's monthly data put the median time on market at 41 days in a recent reading. Anything you do to present the home well works directly against that clock, and moving out first is one of the most effective things you can do.
Borrowers who sell first and buy second often land in a rental, a short-term lease, or a relative's spare bedroom while they hunt for the next home. That means moving twice, paying rent with money that builds nothing, and shopping under time pressure. Rushed buyers overpay. I've seen it over and over across the markets I've worked in. A bridge loan flips the sequence so you move once, directly into the home you actually chose.
For a first-time home buyer none of this applies, since there is no current home to sell. Bridge loans are a repeat-buyer tool. If you're a first-time buyer reading this ahead of your first purchase, your version of this decision is simply how much down payment to bring, and an AmeriSave loan officer can walk that math with you without any bridge involved at all.
Because the collateral already exists and the loan is short, bridge financing can move quickly from application to funding. That speed is the product. When the right house shows up in a competitive market, the buyers who can perform in days rather than weeks are the ones who get it. Pair that speed with a full preapproval on your purchase loan, something like AmeriSave's Certified Approval where your income and credit are verified upfront, and you walk into negotiations looking a lot like a cash buyer.
Now the other side of the ledger, and I want to be direct here, because this is the part borrowers underweight when they are excited about a house.
Bridge loans carry higher interest rates than standard mortgages. For scale, Freddie Mac's Primary Mortgage Market Survey put the average 30-year fixed rate at 6.43% and the 15-year at 5.79% in its most recent weekly release. Bridge loan pricing typically runs a few percentage points above prevailing first-mortgage rates, and lenders commonly quote it as a floating rate built off the prime rate plus a margin. On top of the rate, expect origination fees, an appraisal on your current home, and standard closing costs. Short money is expensive money. Lenders price the risk of a loan whose entire repayment plan depends on a house selling on schedule.
Run the honest version of your monthly budget during the bridge period. In the second-lien structure you have your old mortgage, the bridge payment, and the new mortgage, plus taxes, insurance, and utilities on two properties. Even in the payoff structure you carry two loans and two houses. A budget that looks comfortable with one housing payment can get tight fast with two and a half.
The question I would ask any borrower considering this: can you carry the full stack for twice as long as you think the sale will take? If your honest answer is three months, underwrite yourself at six. Houses don't read your loan documents. They sell when they sell.
Most bridge loans run six to 12 months, and the 12-month mark is where the regulatory definition of temporary financing ends under Regulation Z. When the term ends, the remaining balance comes due all at once. If your home has sold, wonderful, the proceeds retire the loan and you never think about it again. If it has not sold, you're negotiating an extension, refinancing the balance into something else, or cutting your list price to force a sale on the lender's clock instead of yours.
A bridge loan is secured debt. Miss the payments or fail to repay at maturity and the lender can foreclose on your current home, the same as with any mortgage. This is not a reason to avoid the product. It's a reason to respect it. Every secured loan against your house, whether it's a bridge loan, a HELOC, or a home equity loan, puts the roof in the deal.
Every bridge plan contains a hidden assumption, the number your current home will actually sell for. Borrow $110,000 against an expected $180,000 of equity and a sale that closes $25,000 under your estimate still retires the bridge, but the cash you planned to carry into the next chapter shrinks by exactly that much. In a softening neighborhood the damage can go further, forcing a price cut just to beat the loan's maturity date. Housing markets also move unevenly. National medians can rise while your street sits flat, and NAR's own price data is built on the reminder that only year-over-year comparisons mean much because of seasonality. Protect yourself the boring way. Get a hard-nosed comparative market analysis from an agent you trust before you borrow, not a hopeful number from a website widget, and size the bridge against the conservative figure.
Here is one that surprises people. Because bridge loans of 12 months or less are classified as temporary financing, Regulation Z exempts them from the ability-to-repay analysis that applies to standard mortgages, and the federal escrow requirement for certain higher-priced loans carves them out as well. In plain terms, some of the rules that force a lender to slow down and verify that a mortgage fits your finances simply don't apply here. The lender may still check, and good ones do, but the regulation is not making them. That moves more of the diligence burden onto you. Ask more questions on this loan, not fewer.
Numbers beat adjectives, so let's price one out. Take the borrower from earlier with a $400,000 home, $220,000 owed, and a $500,000 purchase. She takes a $110,000 second-lien bridge loan to cover the $100,000 down payment and roughly $10,000 in closing costs on the new home.
Assume the bridge lender charges a 9.5% interest-only rate and a 1.5% origination fee. The origination fee is $1,650 at closing. The monthly interest-only payment is $110,000 times 9.5%, divided by 12, which comes to about $871 per month. If her old home sells in four months, she pays roughly $3,484 in interest plus the $1,650 fee, call it $5,100 to $5,200 all-in before smaller line items like the appraisal. If the sale takes nine months instead, the interest alone climbs to about $7,839 and the total cost of the bridge pushes past $9,500.
Now put that cost next to what it bought her. If a non-contingent offer let her win the house without a bidding escalation, or saved her from a $15,000 price concession a seller might have demanded to accept a contingent offer, the bridge paid for itself. If her market was slow and her old house sat for most of a year, the same loan quietly ate a chunk of the equity she was counting on for the future. Same product, opposite outcomes, and the difference was never the loan. It was the situation the loan was dropped into.
Your loan officer should run this exact table for you with your real numbers before you commit, and if they won't, find one who will. When borrowers bring a buy-before-you-sell plan to AmeriSave, this month-by-month cost math is the conversation, not a rate quote in isolation.
Qualification for a bridge loan starts with the same three questions I would ask any borrower about any loan. How much is your current home worth, and how much do you owe on it? What does your credit look like? And what does your full monthly debt picture look like once every payment in this move is stacked together? The program comes out of those answers, not the other way around.
Equity is the first gate. Most bridge lenders want you to keep a meaningful cushion in the current home after the bridge loan is added, often capping the combined balance of your existing mortgage and the bridge at around 80% of the home's value. On the $400,000 house with $220,000 owed, an 80% cap means total secured debt of $320,000, leaving room for a bridge loan of up to about $100,000. Less equity means a smaller bridge, and thin equity usually means no bridge at all.
Credit and income get a real look too, even though the regulation doesn't force the same analysis a standard mortgage gets. The lender wants evidence you can carry the current mortgage, the bridge payment, and the new mortgage at the same time. Fannie Mae's Selling Guide makes this explicit for the purchase side of the transaction: the lender must document the borrower's ability to successfully carry the payments for the new home, the current home, the bridge loan, and other obligations. Read that sentence twice. Underwriting is going to assume you're paying for everything simultaneously, because for some number of months, you are.
The valuation of your current home deserves its own attention, because it drives everything else. The appraisal or valuation the bridge lender orders sets your usable equity, and it may not match what a listing website told you or what your neighbor's house closed for last spring. Your neighbor's sale price reflects your neighbor's kitchen, your neighbor's lot, and your neighbor's timing, none of which live at your address. If the appraisal lands below your expectation, the bridge shrinks with it, and a plan built on the optimistic number falls apart at the closing table. Order your own comparative market analysis early, before you write any offer, so the number underneath your whole plan is one you've already pressure-tested.
Documentation looks familiar if you've gotten a mortgage before. Pay stubs, tax returns, bank statements, a current mortgage statement, and an appraisal or solid valuation of the home you're borrowing against. On the automated underwriting side, the bridge loan shows up in specific places. Fannie Mae's guidance has the bridge loan entered as an asset on the new purchase application and subtracted from the expected net proceeds of the pending sale, so the same dollars never get counted twice.
Your debt-to-income ratio, or DTI, is your total monthly debt payments divided by your gross monthly income, and it's where bridge loans most often break a purchase that looked fine on paper. Conventional loans underwritten through Fannie Mae's automated system allow a DTI up to 50%. That ceiling has to hold with the whole stack counted.
Fannie Mae treats a bridge loan as a contingent liability that belongs in your recurring monthly debt for qualifying purposes. There is one clean exception worth knowing. The bridge payment, along with the payment on the home being sold, can be left out of the DTI calculation when you provide a fully executed sales contract on the current home and confirmation that any financing contingencies on that contract have cleared. In other words, once your old house is solidly under contract with a committed buyer, underwriting stops assuming you'll carry it forever.
Work the numbers on our example borrower. Say her gross income is $12,000 a month. Her current mortgage payment is $1,700, the bridge payment is $871, the new mortgage with taxes and insurance will be $3,300, and she carries a $400 car payment. Without a contract on her old home, her qualifying debt is $6,271, and her DTI lands at 52%, above the ceiling. The purchase dies in underwriting. With an executed, contingency-cleared contract on the old house, the $1,700 and the $871 drop out, qualifying debt falls to $3,700, and her DTI is about 31%. Same borrower, same houses, same income. The only variable that moved was whether the old home had a committed buyer.
This is why the order of operations matters so much in a buy-before-you-sell plan. Getting your current home listed early, priced honestly, and under contract quickly is not just about your stress level. It can be the difference between qualifying and not qualifying for the new mortgage at all. AmeriSave loan officers run both versions of this DTI math for borrowers planning a move like this, with and without the contract in hand, so you know exactly which side of the line you're on before you write an offer.
Probably the most common thing I see with equity borrowing is someone asking for a specific product because a neighbor or a cousin used it, when a different tool fits their goal better. Shopping with someone else's paperwork is how you end up in someone else's loan. So before you commit to a bridge loan, put it side by side with the other ways to reach the equity in your current home. Homeowners as a group are sitting on an enormous amount of it. ICE Mortgage Technology's Mortgage Monitor pegs total homeowner equity near $17 trillion, with roughly $11 trillion of it tappable while still keeping a 20% cushion, and the average mortgage holder has around $204,000 available to borrow against. The money is there. The question is which door you open.
Three criteria separate these products cleanly, and I would rank every option against all three before choosing. First, cost, meaning the rate, the fees, and how long you'll realistically carry the debt. Second, timing, meaning how fast the money can be in place and whether the product even exists once your home is listed. Third, risk, meaning what happens to you in the bad scenario where the old house sells late or sells low. A bridge loan wins on timing, loses on cost, and concentrates risk in the sale. The alternatives below shuffle that same deck in different ways, which is exactly why the right pick depends on which of the three you can least afford to get wrong.
A HELOC is a revolving credit line secured by your current home. You draw what you need, when you need it, and pay interest only on what you've drawn. Rates are variable on most lines and generally lower than bridge loan pricing, and there is no balloon looming at month 12. The catch for a buy-before-you-sell plan is sequencing. Most lenders won't open a new HELOC on a home that's actively listed for sale, so the line needs to be in place before your house hits the market. Set up ahead of time, a HELOC can cover a down payment the same way a bridge loan would, often at lower cost. AmeriSave offers HELOCs, and details are at www.amerisave.com.
A home equity loan is a lump-sum second mortgage with a fixed rate and a fixed payment, usually stretched over a much longer term than any bridge. Predictability is the appeal. You know the payment on day one and it never moves. The same listing-timing catch applies, since lenders want to see you keeping the home, not selling it next month. For borrowers who want a defined chunk of cash and hate variable rates, this is the steadier cousin of the HELOC. Price it against the bridge scenario with real quotes, not assumptions.
A cash-out refinance replaces your current mortgage with a larger one and hands you the difference in cash. Whether it belongs in this conversation depends almost entirely on your existing rate. If your current mortgage carries a rate well below today's market, refinancing the whole balance to free up a down payment can cost you far more over time than any bridge loan ever would. If your existing rate is at or above current market levels, the math can genuinely work. ICE's Mortgage Monitor data shows homeowners pulled out $205 billion of equity in the most recent full year it tracked, and a large share of that came through second liens precisely because so many owners refuse to give up a low first-mortgage rate. Compare the blended cost honestly. AmeriSave's cash-out refinance is built for the borrower whose numbers actually support the swap.
Maybe a cash-out refinance makes no sense for me personally, because my existing rate is low and I would be repricing my whole balance to free up one down payment. But for a borrower carrying a rate above today's market who wants one payment instead of three, it might be exactly right. That's the whole game with equity products. The right answer lives in your numbers, not in the product brochure.
The zero-debt alternative is simply writing your offer contingent on the sale of your current home. It costs nothing in interest and fees. It costs you negotiating strength instead. In a slower market or on a house that has been sitting, a seller may take a contingent offer without blinking. In a competitive situation, you'll usually lose to the buyer who doesn't need the contingency. Your agent's read on the local market should drive this call, and it's worth an honest conversation before you pay for a loan you might not need.
Selling first turns you into the strongest possible buyer, a cash-heavy one with no contingency and no bridge debt. The price is the in-between period, the double move, and the pressure to find the next home quickly. Some families handle a few months in a rental just fine. Others, especially with kids in school or a household to keep steady, would pay almost anything to avoid it. There is no wrong answer here, only an honest accounting of what your family can absorb. Once your sale closes, a straightforward purchase preapproval through AmeriSave is the simplest version of this path.
Every borrower you talk to is a different file, so instead of a verdict, here is the contrast that actually decides it.
A bridge loan tends to fit when three things are true at once. You have strong equity, comfortably more than the 20% cushion lenders want left behind. Your current home sits in a market where well-priced houses move, a market where the national median of 41 days from NAR's data would feel slow. And your income can carry the stacked payments for longer than your worst-case sale timeline without wrecking your reserves. When all three hold, the bridge is a timing tool doing exactly its job, and the cost is the price of winning the house you want on your schedule.
A bridge loan tends to fail the same borrower three different ways. Thin equity leaves no room to borrow and no cushion if the sale price disappoints. A slow or declining local market stretches the loan past its term and turns a timing tool into a standoff with a balloon payment. And a tight monthly budget, one that only works if the house sells fast, converts every extra week on market into real financial stress. If two of those three describe you, the answer is not a braver version of the bridge. It's a HELOC set up before listing, a contingent offer, or selling first.
Picture the contrast with two borrowers holding identical $180,000 equity positions. The first owns a well-kept three-bedroom in a neighborhood where the last four listings went under contract inside three weeks, has a household budget that absorbs the stacked payments at 38% DTI, and lists the old home the same week she goes under contract on the new one. The second owns a dated property in a subdivision with five active listings and two price cuts, would sit at 48% DTI during the overlap, and plans to list after the move because the house needs work first. Identical loan, identical equity, opposite risk. The first borrower is buying convenience with a small, known premium. The second is borrowing against a sale that has not earned that confidence yet.
Here in the Dallas-Fort Worth metroplex I've watched the same product work beautifully for one family and painfully for another in the same year, sometimes in the same neighborhood. The loan never changed. The situations did. Dig deep into which situation is actually yours before you sign, because the paperwork won't do that digging for you.
At AmeriSave I own the project that scripts how our loan officers structure borrower phone calls, and the reason that project exists applies directly here. If you ask different questions in different ways, you get different answers. Structured questions get you structured answers, and structured answers are the only kind you can compare across lenders. So bring the same list to every bridge lender you talk to.
Ask what the interest rate is, whether it floats, and what index and margin set it. Ask for every fee in writing, origination, appraisal, underwriting, and anything else, expressed in dollars. Ask whether payments are monthly interest-only, deferred until sale, or something else. Ask what the term is, what an extension costs, and what specifically happens on the day after maturity if the home has not sold. Ask whether there is a prepayment penalty if your house sells in week three. Ask whether the loan is a second lien behind your current mortgage or a payoff of it. And ask how the lender handled extensions for borrowers whose homes did not sell on time, because the honest answer to that last one tells you more about the lender than any rate sheet.
Then take the answers, line them up, and compare them against a HELOC quote and, if your existing rate supports it, a cash-out refinance quote. Working across different markets and regulatory environments over the years has taught me that the borrowers who get the best outcomes are almost never the ones who found a secret product. They are the ones who asked the same disciplined questions everywhere and let the answers pick the loan.
One more habit worth stealing from the professional side: write the answers down while you're on the call. Memory rounds numbers in whatever direction you were hoping for, and a week later every quote sounds the same. A one-page sheet with each lender's rate, fees, term, extension terms, and payoff rules, filled in while the answers are fresh, turns a stressful decision into a reading exercise.
The goal should always be to keep the path from your current home to your next one as clear as possible. That means knowing your equity number before you shop, getting your current home market-ready early, and pricing every option, bridge, HELOC, home equity loan, cash-out refinance, contingent offer, with your real numbers side by side. If you have a question about any line on any estimate, ask it. If something in the structure is not clear, get it clarified before you commit, not after. That's how you end up at two closings with no surprises.
A bridge loan is neither a trap nor a magic key. It's a specific tool for a specific gap, priced for the risk it carries. Borrowers with strong equity, a sellable home, and room in their budget use it to win houses and simplify moves every day. Borrowers missing one of those legs pay for flexibility they cannot actually use. Figure out which borrower you are first. If you want help running that comparison, an AmeriSave loan officer can price the alternatives against your actual situation, and the preapproval conversation for your next purchase can start at www.amerisave.com whenever you're ready.
Jerrie leads sales operations in the Dallas-Fort Worth region for AmeriSave, where his entire mortgage career has been spent since being recruited into the industry at age 18. Licensed as a Mortgage Loan Originator in 37 states, he specializes in making complicated loan options accessible and helping borrowers understand what matters most in their individual situations. He brings deep regulatory knowledge and a client-centric approach honed through progression from entry-level to upper management, including successfully onboarding and training 70 people from a closed Cleveland office.
Most bridge loans run six to 12 months, and the 12-month mark matters legally. Regulation Z defines temporary or bridge financing as a loan with a term of 12 months or less, which is why lenders build the product inside that window. The balance typically comes due in full when your current home sells or the term ends, whichever comes first. If the home has not sold by maturity, you're looking at an extension, a refinance into a different product, or a price cut to move the house quickly. Before signing, get the extension terms and their cost in writing.
Yes, in most cases it does. Fannie Mae treats a bridge loan as a contingent liability that belongs in your recurring monthly debt when you qualify for the new mortgage, and conventional loans underwritten through its automated system cap DTI at 50%. There is one important exception. When you provide a fully executed sales contract on your current home and confirmation that financing contingencies have cleared, the bridge payment and the old home's payment can be excluded from the calculation. Getting your current home under contract early can be the difference between approval and denial.
Most lenders want your total borrowing against the current home, existing mortgage plus bridge loan, capped at around 80% of its value, which means you need well over 20% equity for the loan to produce useful cash. On a $400,000 home with $220,000 owed, an 80% cap leaves room for roughly $100,000 of bridge financing. Nationally the cushion exists for many owners. ICE Mortgage Technology's Mortgage Monitor puts tappable equity, the amount accessible while keeping a 20% stake, near $11 trillion, with the average mortgage holder able to borrow against about $204,000.
Yes, meaningfully higher. Freddie Mac's Primary Mortgage Market Survey showed the average 30-year fixed mortgage at 6.43% in its most recent weekly release, while bridge loan pricing typically runs a few percentage points above prevailing first-mortgage rates, often quoted as a floating rate off the prime rate plus a margin. Add an origination fee, commonly 1 to 2% of the loan amount, plus an appraisal and closing costs. The premium is the price of short-term, sale-dependent money. Total cost depends heavily on how fast your home sells, so model a slow sale, not just a fast one.
The full balance still comes due, and that's the core risk of the product. Your realistic options are requesting an extension, which comes with additional fees and interest, refinancing the bridge balance into a home equity loan or another product, or cutting your list price to force a faster sale. Because the loan is secured by your current home, continued nonpayment can ultimately lead to foreclosure. This is why underwriting yourself conservatively matters so much upfront. Plan around a sale timeline twice as long as you expect, and confirm the lender's extension policy in writing before you close.
It depends on your timeline and your equity. A HELOC generally offers lower rates than a bridge loan, no balloon at month 12, and interest charged only on what you draw, which makes it the cheaper tool when it's available. The obstacle is sequencing, because most lenders won't open a new line on a home that's already listed for sale, so the HELOC has to be in place before your house goes on the market. If you're planning months ahead, the HELOC path usually wins on cost. If the perfect house appeared yesterday and your home is not listed yet, compare both with real quotes.
Yes. Fannie Mae's Selling Guide lists bridge and swing loans as an acceptable source of funds for a purchase, with conditions. The bridge loan cannot be cross-collateralized against the new property, meaning it must be secured only by the home you're selling, and the lender must document your ability to carry the payments on the new home, the current home, and the bridge at the same time. On the application, the bridge proceeds are entered as an asset and subtracted from the expected net proceeds of your pending sale so the funds are not counted twice.
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