A bridge loan and a HELOC both use your home's equity as collateral — but that's where the similarity ends. A bridge loan is a short-term financing tool designed for a specific transaction: buying your next home before selling your current one. A HELOC is a revolving credit line for ongoing access to equity. Choosing the wrong one can cost you money, time, or both.
You've found the home you want. Your current home hasn't sold yet. You need the equity from your current home to fund the down payment on the new one. A bridge loan solves this by providing short-term capital — typically 6 to 12 months — secured by your existing home's equity.
At AFC Mortgage Group, we do our own bridge lending in-house. We use our own capital, make our own decisions, and can close in as little as 10 days. Our bridge program gives you up to 4 months to sell your current home after closing on the new one.
You're not buying a new home — you want flexible, ongoing access to your equity. Home improvements, debt consolidation, business capital, education costs, or simply having a financial cushion. A HELOC lets you draw what you need, when you need it, and pay interest only on what you use.
HELOCs typically have a 5-10 year draw period followed by a 10-20 year repayment period. Rates are usually variable, tied to Prime plus a margin.
Timeline: Bridge loans are 6-12 months. HELOCs last 15-30 years.
Purpose: Bridge loans fund a specific purchase. HELOCs provide flexible access.
Rate structure: Bridge loans have higher short-term rates. HELOCs have lower variable rates.
Repayment: Bridge loans are paid off when your home sells. HELOCs convert to amortizing payments after the draw period.
Speed: AFC's bridge loans can close in 10 days. HELOCs typically take 2-4 weeks.
Yes — in some situations, a HELOC on your current home provides the down payment for the new home, effectively serving as a bridge. The advantage is a lower rate. The risk is carrying two housing payments plus the HELOC payment until you sell. Your AFC loan officer will model both scenarios with your actual numbers.
If you're buying before selling, talk to us about a bridge loan. If you want flexible equity access for any other purpose, a HELOC is likely the right tool. Call AFC Mortgage Group at (203) 452-9899 to discuss your specific situation.
AFC Mortgage Group LLC | NMLS #2801 | Monroe, CT
Become homeowners. AFC Mortgage Group will help you navigate the loan process, secure financing, and purchase your dream home.
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