Bridge Loan vs HELOC in Florida: Funding the Next Home Before the Current One Sells
Bridge loan vs HELOC Florida move-up buyers compare both borrow against the current home to buy the next. The HELOC is cheaper and must be opened before listing; the bridge is built for the gap.
Educational content only. This article is for informational purposes and does not constitute financial, legal, or lending advice. Loan programs, rates, and eligibility requirements change frequently. Consult a licensed mortgage professional before making any borrowing decision. Mortgage Capital | NMLS# 1859012 | Licensed in Florida.
Bridge loan vs HELOC Florida move-up buyers compare both borrow against the current home's equity to fund the next purchase before the sale closes.
The HELOC is cheaper and must be in place before you list. The bridge loan is built for the gap and costs more. Our bridge loan page and HELOC page cover both.
The problem both solve
You need the equity from the current home for the down payment on the next.
The sale has not closed.
See our guide to moving to Florida and getting a mortgage.
The CFPB explains bridge loans and their risks.
A contingent offer is weak in a competitive market.
Borrowed equity makes the offer non-contingent.
The HELOC route
Open a line on the current home while you still live there.
See our guide to HELOC versus home equity loans in Florida.
Draw the down payment at the new closing.
Pay it off from the sale proceeds.
Low closing costs; variable rate for a few months.
The HELOC catch
Lenders will not open a HELOC on a home that is listed for sale.
Open it months before listing.
Some lenders require the line to be open a set period before a draw.
The HELOC payment counts in your ratios for the new mortgage.
See our guide to maximum DTI in Florida.
The bridge loan route
A short-term loan against the current home, sometimes both homes.
See our guide to bridge loan rates in Florida.
Funds the down payment or the whole purchase.
Repaid from the sale within six to twelve months.
Higher rate, points and fees.
The bridge loan catch
Cost: points plus a rate above a HELOC.
Fewer lenders; some require the current home to be under contract.
See our guide to closing date delays in Florida.
A sale that drags extends the bridge at more cost.
Florida doc stamps on the bridge note.
Qualifying with three payments
Current mortgage, bridge or HELOC, and the new mortgage.
Some lenders exclude the current home's payment with a signed sale contract.
Others count everything.
See our guide to relocation package mortgages in Florida for guaranteed buyouts that solve it.
Reserves are required for each.
Cost comparison
HELOC: a few hundred in costs, interest for a few months.
Bridge: points on the loan amount plus interest.
See our guide to Florida doc stamps and intangible tax.
On a large down payment, the bridge costs thousands more.
The HELOC wins on price every time it is available.
Timing comparison
HELOC: weeks to open, must precede listing.
Bridge: days to weeks, can be arranged after listing.
A buyer who did not plan ahead uses the bridge.
A buyer who did uses the HELOC.
Planning is worth thousands.
The recast after
Buy the new home with a larger loan, sell the old one, and recast the new loan with the proceeds.
See our guide to mortgage forbearance in Florida for what a recast is not.
A recast lowers the payment without refinancing.
Confirm the new lender allows recasts.
This avoids both a bridge and a HELOC for some buyers.
Buy-before-you-sell programmes
Some companies buy your old home or guarantee its sale for a fee.
See our guide to seller concessions in Florida for how their fees compare.
Convenient; expensive.
Read the fee schedule.
A HELOC and a good agent usually cost less.
Selling first
Sell, rent back or move to temporary housing, then buy.
See our guide to rent-backs in Florida.
No bridge, no HELOC, no three payments.
Two moves or a rent-back negotiation.
The cheapest route if the market allows.
Florida timing hazards
Hurricane season can suspend closings on either end.
See our guide to hurricane insurance claims and your mortgage in Florida.
Condo approvals add weeks.
A bridge with a short term and a slow sale is where costs pile up.
Build slack into the term.
Investors
Investors use both to move between properties.
See our guide to BRRRR in Florida.
A HELOC on a primary residence funds rental down payments cheaply.
Bridge loans on rentals are priced as hard money.
See our guide to hard money versus private money in Florida.
Paying it off
Both are paid at the old home's closing from proceeds.
See our guide to mortgage payoff letters in Florida.
A HELOC must be closed, not just paid to zero, to release the lien.
Order the payoff and the close-out letter together.
The title company handles both.
A worked decision
A homeowner six months from listing: open a HELOC now, draw it at the new closing, pay it off at the old closing.
A homeowner already listed with an accepted offer on a new home: a bridge loan, sized to the down payment, paid off in ninety days.
Same outcome; the second costs several thousand more.
The calendar decided it.
Plan six months ahead when you can.
Where to start
Estimate the equity you need from the current home and when you will list.
If listing is months away, open the HELOC now.
Then start a conversation and we will price the new mortgage with the bridge or HELOC included.