Making the Move Without the Stress
If you’re ready to move but need to sell your current home first, you’re not alone. Many sellers face the same challenge: how to buy a new home before their existing one sells. Three common solutions—bridge loans, HELOCs (Home Equity Lines of Credit), and sale contingencies—each offer distinct advantages and drawbacks. Understanding which option best fits your situation can make all the difference in how smoothly your move goes.
“Choosing the right financial path can mean the difference between a seamless transition and a stressful juggling act,” says Meredith Fogle, Montgomery County real estate expert and founder of The List Realty. “Each option serves a purpose—it’s just a matter of finding the right one for your goals and comfort level.”
Option 1: Bridge Loan — Speed and Flexibility
A bridge loan is a short-term loan that lets you use your current home’s equity to fund the down payment on your next home before your sale closes.
Pros:
- You can make a non-contingent offer on your next home (a major advantage in a competitive market).
- It keeps your purchase timeline moving without waiting for your sale.
Cons:
- Interest rates are typically higher than a standard mortgage.
- It’s meant for the short term—usually 6–12 months—so timing is critical.
Best For: Homeowners with strong credit and predictable sale timelines who want to move fast without waiting for their current home to sell.Option 2: HELOC — Flexibility Without a Full Loan
A Home Equity Line of Credit (HELOC) lets you borrow against the equity in your existing home as needed, up to a limit set by your lender. It’s revolving credit, meaning you can draw funds, repay, and draw again.
Pros:
- Only pay interest on what you use.
- Lower rates than bridge loans.
- Can be used for other expenses like renovations or staging before listing.
Cons:
- You must have significant equity already built up.
- The line typically needs to be in place before you list your home for sale—most lenders won’t issue one once your home is on the market.
Best For: Sellers with enough equity and time to plan ahead who want financial flexibility.Option 3: Contingency — Lower Risk, Slower Pace
A sale contingency means your offer to buy a new home is dependent on your current home selling first.
Pros:
- No need to juggle two mortgages at once.
- Low financial risk if your home doesn’t sell quickly.
Cons:
- In a competitive market, contingent offers are often less attractive to sellers.
- It may cause you to miss out on homes with multiple offers.
Best For: Homeowners in slower markets or those who prefer minimal financial risk over speed.How to Decide Which Option Fits You Best
Your decision depends on your timeline, equity, market conditions, and comfort level with risk.
- Fast-moving markets: Bridge loans and HELOCs help you stay competitive.
- Balanced markets: Contingencies can work if homes take longer to sell.
- Equity-rich homeowners: A HELOC may offer the best flexibility at the lowest cost.
“I always encourage sellers to talk to both their lender and their agent before deciding,” Meredith adds. “The right strategy is different for everyone—and often a quick conversation can reveal creative solutions you hadn’t thought about.”
Bottom Line
Buying and selling at the same time doesn’t have to be overwhelming. By understanding the pros and cons of bridge loans, HELOCs, and contingencies—and getting expert advice—you can move forward with confidence and control.
