Using HELOCs and Bridge Loans in Highland Moves

Buying your next Highland home before your current one sells can feel like solving a puzzle under a deadline. You want flexibility, privacy, and a strong offer in a market where desirable homes move quickly. This guide shows you how two tools — HELOCs and bridge loans — can help you unlock equity, strengthen your position, and control timing. You’ll learn how each product works, how lenders underwrite them, what they cost, and the risk controls that keep your move on track. Let’s dive in.

HELOC vs. bridge loan basics

A HELOC (home equity line of credit) is a revolving line secured by your current home. You draw what you need during a set draw period, often paying interest only, and repay when your home sells. In a move, many Highland sellers use a HELOC for the down payment and closing costs on the new purchase, then pay it off with sale proceeds.

A bridge loan is a short-term, interest-only loan designed to fund your purchase before your sale closes. It can be secured by your current home, the new one, or both. You repay the bridge when your current property sells.

When a HELOC fits: you have sufficient equity within your lender’s combined loan-to-value (CLTV) limits, want lower carrying cost, and value flexible draws. When a bridge fits: you need speed, a clean non-contingent offer, or a lender structure that ties directly to the purchase timeline.

Alternatives to consider

• Cash-out refinance to free equity with long-term mortgage pricing.
• Personal or portfolio products from local credit unions or banks.
• Contingent offers or rent-back strategies, which reduce financing costs but can weaken your offer in competitive situations.

How lenders approve these loans

CLTV, credit, and DTI

Lenders focus on CLTV caps, credit score, and debt-to-income (DTI). Many cap CLTV around 80 to 90 percent, but limits vary by lender and borrower profile. Strong credit and lower DTI improve approval and pricing for both HELOCs and bridge loans.

Documentation and valuation

Expect income verification, equity documentation, and title work. Lenders commonly require pay stubs, bank statements, and tax returns. Appraisals or automated valuations help confirm value for lien placement. Both products create recorded liens on the secured property.

Timing in Utah County

HELOCs can take several weeks from application to close due to appraisal and underwriting. Bridge loans are structured for speed, though they still require appraisal and title work. Working with local lenders familiar with Utah County processing and the county recorder can help keep timelines tight.

Interaction with your new mortgage

Your purchase-mortgage underwriter will require disclosure of existing liens and may count payments toward DTI. Some lenders factor a payment for undrawn HELOCs. Clarify in advance how your purchase lender treats a HELOC or bridge so your approval remains smooth.

Costs, taxes, and legal details

Cost structure overview

• HELOCs usually carry variable rates tied to prime with lower ongoing cost than bridge loans. You may see application, appraisal, title, or annual fees.
• Bridge loans typically have higher interest rates and origination or exit fees. Some include interest reserves or balloon terms due at maturity.
• Cash-out refinances come with full mortgage closing costs but can be economical if you plan to hold the debt long term.

Pricing varies widely by lender and profile. Request written term sheets and fee comparisons before you decide.

Tax deductibility basics

Mortgage interest deductibility depends on how you use the proceeds and which home secures the loan. In general, interest on new home-equity debt is deductible only when used to buy, build, or substantially improve the property that secures the loan. Document how you use funds, and consult a tax professional for your specific situation.

Title, liens, and privacy

Liens are recorded publicly. A HELOC or bridge on your current home, or a bridge secured to your new home, will appear in county records. Review due-on-sale language in your existing mortgage and read default provisions for short-term loans with balloon terms. If privacy is a priority, coordinate with your agent and title company on timing and recording practices that support your strategy while following local rules.

Offer strength in Highland

Non-contingent power

Access to a HELOC or bridge can let you waive a sale contingency, which sellers value. A firm commitment or approval letter that proves access to funds can strengthen your offer.

Closing speed and certainty

Being able to close quickly is often an advantage in Highland and Utah County’s more competitive pockets. Align your loan’s timeline with typical local closing windows and days-on-market expectations so you can move decisively when the right property appears.

Risk controls and exit strategies

Key risks to watch

• Double housing costs while you own both properties.
• Market timing risk if your current home takes longer to sell or sells for less than expected.
• Higher short-term financing costs, especially with bridge loans.
• Underwriting or title issues that delay payoffs.

Practical exit options

• Primary exit: sell the current home and pay off the HELOC or bridge from proceeds.
• Secondary exit: refinance the HELOC balance into a permanent mortgage if the sale is delayed.
• Rent the current home to cover payments if needed, subject to loan covenants and occupancy rules.
• Negotiate a bridge extension if the market is slower than planned.
• Maintain a contingency reserve to cover several months of combined payments.

Build your safety net

Write down your minimum acceptable net sale price after costs, rate your confidence in hitting that number, and pre-plan alternatives. Keep a cash or credit cushion for several months of payments. Get written commitments on draw availability and closing timing from your chosen lender.

A practical Highland workflow

1. Meet with a Highland-focused agent to estimate time-to-sell and price expectations based on current MLS trends.
2. Obtain pre-approval for your purchase mortgage and preliminary approval or term sheets for a HELOC or bridge.
3. Structure your offer with proof of funds and limit contingencies to items like appraisal or clear title.
4. Coordinate appraisal and title work for both properties at the same time when possible.
5. List your current home with timing aligned to your purchase closing; plan for overlapping occupancy or a rent-back if needed.
6. Close on your purchase using HELOC or bridge proceeds and move promptly to market and sell your current property.
7. Pay off the HELOC or bridge at sale; if delayed, activate your contingency plan.

Choosing the right tool

Ask yourself:

• Do my CLTV, credit, and DTI support a HELOC within lender limits, or is a bridge more realistic?
• Is speed the priority, or is overall cost more important?
• How confident am I in my sale timeline and price in Highland’s current conditions?
• Which structure gives my offer the most certainty with the least friction?

Make side-by-side comparisons from at least two or three local lenders. Confirm how your purchase lender treats HELOCs or bridge payments in DTI. Coordinate title and payoff timing with the Utah County recorder through your title company so liens release cleanly at close.

When used thoughtfully, a HELOC or bridge loan can give you the privacy, timing, and certainty you want for a smooth Highland move. With careful underwriting prep, a realistic exit plan, and the right local team, you can buy first with confidence and sell on schedule.

Ready to map your financing path and timing strategy? Request Private Access or Schedule a Private Consultation with Echelon Luxury Homes to explore options tailored to your move.

FAQs

Will a HELOC affect my new mortgage approval?

• Yes. Purchase-mortgage underwriters require disclosure of existing liens and may count a payment for a drawn or even undrawn HELOC when calculating DTI.

How much can I borrow with a HELOC or bridge?

• It depends on CLTV limits, credit, and lender policy. Many lenders cap combined LTV around 80 to 90 percent, but exact limits vary.

How long do bridge loans last?

• Many bridge loans run 6 to 12 months, and some extend up to 18 months depending on the provider and terms.

Which is usually cheaper: HELOC, bridge, or cash-out refi?

• HELOCs and cash-out refinances are generally less expensive over time than bridge loans, but the best choice depends on your timeline and fees.

What if my current home does not sell in time?

• Options include refinancing the balance, negotiating a bridge extension, renting the property, or using reserves. Build a contingency plan in advance.

Is HELOC interest deductible if used to buy my next home?

• Deductibility depends on how you use the proceeds and which property secures the loan. Keep detailed records and consult a tax professional.

Do these loans appear in public records and impact privacy?

• Yes. Liens are recorded publicly. Work with your agent and title company on timing and strategies that support discretion while following local rules.