Buying your next McLean home before selling your current one can feel like threading a needle. You want the right house, a strong offer, and a smooth handoff without carrying two homes longer than you must. The two most common tools are a bridge loan and a HELOC, yet they work very differently and fit different situations. This guide breaks down mechanics, costs, and local market realities so you can choose with confidence. Let’s dive in.

Bridge loans: how they work

A bridge loan is short-term financing tied to your current home that gives you a lump sum for the down payment or the full purchase on your next home. You typically make interest-only payments for 6 to 12 months, then repay the balance when your existing home sells. Many lenders focus on your combined loan-to-value across properties and want to see solid equity in your current home.

Key features:

• Purpose: fund a purchase before your current home sells, often to remove a home-sale contingency.
• Structure: interest-only during the term with a balloon payoff at sale; some lenders place liens on both homes.
• Equity: lenders often cap combined LTV and expect meaningful equity in your current home.
• Costs: higher rates and fees than standard mortgages, plus appraisal and legal costs.

Why buyers use it:

• You want to make a non-contingent offer in a competitive McLean price band.
• You need a large, immediate down payment while equity is tied up in your current home.
• You prefer a defined, short payoff once your home sells.

HELOCs: how they work

A HELOC is a revolving line of credit secured by your current home. You can draw what you need for earnest money, a partial down payment, or other expenses, then repay and reuse the line during the draw period. Payments are typically variable and tied to an index plus a margin.

Key features:

• Purpose: flexible line for down payments and short-term cash needs while your home is on the market.
• Structure: draw period followed by a repayment period; interest-only is common during the draw.
• Equity: limit depends on your home value, current mortgage balance, credit, and lender policy.
• Costs: generally lower fees than bridge loans but with variable-rate risk.

Why buyers use it:

• You want lower upfront cost than a bridge loan.
• You only need part of the down payment and prefer flexibility.
• You like keeping a line open for future needs such as improvements or closing costs.

Costs and qualification: what to expect

Both products require credit review, income verification, and an appraisal of your current home. Bridge loans often come with higher interest rates and origination fees because they are short-term and carry more lender risk. HELOCs usually have lower fees but expose you to rate changes during the draw period.

What lenders look at:

• Equity and combined LTV across your current and future homes.
• Debt-to-income and reserves to cover dual housing costs if needed.
• Documentation such as purchase contracts, listing agreements, and payoff plans.

Practical constraints:

• Some purchase lenders count outstanding HELOC or bridge balances in your qualifying ratios. Always confirm how your purchase lender will treat these debts.
• Some HELOCs have seasoning or draw timing requirements. Open lines early if you plan to use one.
• Bridge lenders may ask for proof that your current home is marketable or already under contract.

McLean market context: why it matters

McLean and surrounding Fairfax County often see low inventory at higher price points, which can create competition for well-priced properties. In tight conditions, sellers commonly prefer offers without a home-sale contingency. That is where a bridge loan can help you write a stronger offer, even though it costs more.

If conditions ease and inventory rises, a HELOC paired with a sale contingency may be acceptable. Timing matters, and so does pricing. Your strategy should reflect current days on market and how often sale contingencies are succeeding for comparable homes in your target area.

Pros and cons at a glance

Bridge loan pros

• Enables a non-contingent offer that can win in fast McLean segments.
• Provides the full amount you need for a down payment or more.
• Short-term structure with payoff at sale of your current home.

Bridge loan cons

• Higher interest rates and fees than standard mortgages.
• Requires stronger equity and liquidity.
• You may carry two homes if your sale takes longer than expected.

HELOC pros

• Lower upfront costs and flexible draws.
• Useful for earnest money and partial down payments.
• Easy to keep open for future needs.

HELOC cons

• Variable rates can raise your payment.
• May not give you enough cash to remove a sale contingency.
• Outstanding draws can reduce your purchase qualifying power.

Simple examples

• If you need $200,000 for a down payment and most of your equity is locked in your current home, a bridge loan can deliver a lump sum so you can write a non-contingent offer.
• If you only need $75,000 for earnest money and a partial down payment, a HELOC may be cheaper and flexible. The tradeoff is that your offer could still depend on selling your current home if you cannot fund the full down payment.

Which option fits your situation

Scenario A: High equity, must buy first

You want to avoid a contingency, and you can handle short-term carrying costs. A bridge loan can be the best fit if you have strong equity and want to compete for a prime McLean listing.

Scenario B: Moderate equity, cost sensitive

You are open to a sale contingency if needed, and you only need part of the down payment. A HELOC can be a practical, lower-cost tool, especially if you open it before shopping.

Scenario C: Lower equity or lower risk tolerance

You prefer not to carry two homes. A sale contingency, back-to-back closings, or other liquidity sources can reduce risk even if it limits offer strength.

Questions to ask lenders

• What combined LTV do you require for a bridge loan or HELOC, and how do you document equity?
• What are the rate, fees, and APR for each option, and how long is the bridge term?
• How will an outstanding HELOC draw or bridge balance be treated in purchase underwriting?
• What documents do you need from me, and how fast can you fund?
• Are there prepayment penalties, extension fees, or balloon payment requirements?
• What happens if my current home does not sell within the bridge term?

Legal, tax, and closing details

Interest deductibility can depend on how you use the funds and current tax rules. Ask a qualified tax professional how the rules apply to your situation. Bridge loans and HELOCs create liens that must be coordinated by your lender and title company, especially for payoff timing at closing. Planning ahead keeps both closings on schedule.

Step-by-step game plan

1. Run a cash flow check. Confirm you can cover payments on two homes if needed and set aside reserves.
2. Get preapproved for your purchase mortgage and discuss how bridge or HELOC debt will be treated.
3. Compare bridge and HELOC quotes side by side. Ask about equity requirements, fees, and funding timelines.
4. Review local market competitiveness with your agent. Align your financing choice with days on market and contingency acceptance trends for comparable McLean homes.
5. Line up title and closing logistics early. If you plan back-to-back closings, confirm payoff sequencing and wiring with your title company.
6. Finalize your offer strategy. Decide how much risk and cost you will accept to secure the right home.

Bottom line

If you need to buy first in a competitive McLean segment, a bridge loan can unlock a stronger, non-contingent offer but at a higher cost. If you are comfortable with a sale contingency or need a smaller amount, a HELOC is usually more cost effective and flexible. The right choice comes down to your equity, cash flow, timeline, and the current local market.

Ready to map out your move-up plan with a calm, step-by-step strategy tailored to McLean and Northern Virginia? Connect with the team at Embrey Properties to compare scenarios and craft a winning offer.

FAQs

What is the key difference between a bridge loan and a HELOC for move-up buyers?

• A bridge loan gives you a lump sum to buy before selling, while a HELOC is a revolving line you draw from for partial funds like a down payment or earnest money.

Can a HELOC help me make a non-contingent offer in McLean?

• Only if the line provides enough cash for your down payment and your lender allows immediate use; many buyers still need a contingency when a HELOC limit is smaller.

How do lenders treat bridge loans or HELOCs when I qualify for the new mortgage?

• Some underwriters count outstanding balances in your debt ratios, which can reduce borrowing power; confirm treatment with your purchase lender before you proceed.

What happens if my current home does not sell before the bridge term ends?

• You may need an extension, a refinance, or to carry both loans longer, which increases costs; plan reserves and a fallback in advance.

Which option usually costs less upfront in Fairfax County?

• HELOCs often have lower fees and potentially lower rates than bridge loans, although costs depend on lender terms and how long you carry the debt.

When does a bridge loan make the most sense for McLean buyers?

• When inventory is tight, competition is high, and you need to remove a sale contingency to win the home you want, and you have the equity and reserves to carry it.