Buying your next Sandy Springs home before your current one sells can feel like juggling on a deadline. School calendars, commute times, and low inventory make timing tricky, and few families want two moves or months of storage. A bridge loan can be the tool that lets you buy first, then sell with confidence. In this guide, you’ll learn how bridge loans work, what they cost, the risks and alternatives, and a clear plan to prepare in Sandy Springs and North Fulton. Let’s dive in.
Bridge loans, in plain English
A bridge loan is short-term financing that lets you tap your current home’s equity to fund the purchase of your next home before your sale closes. Most terms run 3 to 12 months. Many lenders offer interest-only payments and require you to pay off the bridge when your old home sells or when you refinance.
Lenders can secure the bridge against your current home, your new home, or both. The goal is simple: give you access to cash for a competitive offer without forcing a temporary move.
When bridge loans fit in Sandy Springs
Sandy Springs and nearby North Fulton and DeKalb suburbs can be competitive, especially around summer when many families plan moves. Low inventory in certain micro-markets means the right home may not wait for your sale to close.
If you need to write a non-contingent offer, avoid a short-term rental, or coordinate closings around school breaks, a bridge loan can create that timing flexibility.
How a bridge loan works
Bridge financing comes in a few common structures:
- Closed-end bridge: a set amount funds your purchase, often secured by your current home, with payoff tied to your sale.
- Open-end or line-style bridge: works like a short-term line of credit designed to cover your down payment or overlap costs.
- Equity bridge for simultaneous purchase: advances a portion of your equity for the new home’s down payment, then is repaid at your sale.
- Portfolio lender bridge: local banks or credit unions may hold these loans in-house and can be more flexible on timing.
You typically make interest-only payments during the term. Some lenders allow you to roll payments into the payoff at closing, but you should confirm how interest accrues and when it is due.
Typical lender requirements
Expect tighter underwriting than a standard purchase loan because lenders consider two homes at once.
- Credit score: many lenders prefer strong scores, commonly 680 or higher.
- Debt-to-income: your DTI often must stay under roughly 45 to 50 percent, factoring in both properties.
- Loan-to-value: advances are limited to a portion of your combined equity, often keeping total liens below about 80 to 90 percent CLTV.
- Cash reserves: several months of payments on both properties may be required.
- Appraisal and title: standard appraisal and clear title on the secured property.
- Sales plan: proof that your current home will be marketed, such as a listing agreement and marketing plan.
What it costs
Bridge loans are more expensive than long-term mortgages, which is the tradeoff for speed and flexibility.
- Interest rate: often 1 to 3 percent higher than standard mortgage rates, depending on product and risk.
- Fees: expect origination, appraisal, title, and closing costs. Some lenders charge a flat fee or a percentage for short-term financing.
- Payments: interest-only is common. Confirm whether payments are monthly or can be settled at payoff.
- Prepayment: many products allow payoff at sale without penalty. Verify penalty and extension terms in writing.
Key risks and how to manage them
Carrying costs and timing are the main risks. A clear plan can keep you on track.
- Carrying two homes: you are responsible for two housing payments until your sale closes. Budget conservatively and have reserves.
- Market risk: if your home takes longer to sell or sells for less than expected, your costs go up. Price competitively and invest in presentation.
- Higher financing costs: if your bridge extends beyond expectations, the premium can add up. Build a realistic timeline and a backstop.
- Operational hurdles: lender conditions and closing timing can misalign. Choose lenders and an agent experienced with simultaneous closings.
Mitigation strategies:
- Budget for 2 to 3 extra months beyond your optimistic sale timeline, including mortgage, taxes, insurance, utilities, and maintenance.
- Launch a strong listing plan with professional photography, staging guidance, and proactive marketing to reduce days on market.
- Set a contingency plan, such as a HELOC, family funds, or a short rental if needed.
- Negotiate a rent-back when possible, with a capped duration and clear terms.
- Coordinate payoff logistics early with your lender, title team, and agent.
- Consult a real estate attorney for leasebacks and a tax advisor about interest deductibility.
Alternatives to bridge loans
Bridge financing is not the only path. Compare cost, flexibility, and timing for your situation.
- HELOC or home equity loan: usually lower cost with flexible draws. You start payments immediately and may not access enough for a full down payment. Works well if you have ample equity and time.
- Cash-out refinance: can be cheaper than a bridge and consolidates debt into one mortgage. It takes longer to close and increases your mortgage balance.
- Contingent offer: avoids extra financing but is often less attractive to sellers in competitive Sandy Springs micro-markets.
- Rent-back or seller leaseback: aligns timing if both sides agree. Terms need to be clear on duration, rent, insurance, and liability.
- Temporary rental or storage: eliminates financing risk but adds moving costs and disruption.
- Portfolio or swing loan from a local bank: tailored and fast, though availability and terms vary.
Your preparation checklist
Get your documents and strategy ready before you write an offer.
- Mortgage statements for your current home, including balance and rate
- Income documents, such as pay stubs, W-2s, 1099s, or tax returns
- Asset statements for bank and retirement accounts, plus reserves
- Credit check and any dispute resolutions in progress
- Signed listing agreement and a marketing plan for your current home
- Appraisal readiness, including access for the lender’s appraiser or BPO
- Backstop plan, such as a HELOC pre-approval, family funds, or rental plan
Smart questions to ask a bridge lender
Clarify terms, costs, and payoff mechanics before you commit.
- What is the exact product, term length, and payment structure?
- What maximum LTV or CLTV applies, and how much equity can I access?
- What are total fees and estimated APR, including any standby charges?
- How much in reserves do you require and what documentation is needed?
- What triggers repayment and how does payoff work at sale closing?
- Are there prepayment penalties or extension options?
- How do you handle appraisal shortfalls or a slower-than-expected sale?
Questions to ask your real estate agent
The right listing strategy can shorten your bridge window and lower costs.
- What is a realistic timeline to sell in my Sandy Springs neighborhood?
- Which marketing steps will minimize time on market, including staging and pricing?
- What experience do you have coordinating simultaneous closings and rent-backs?
- Which local lenders or portfolio lenders have reliable bridge programs?
Local timing and logistics tips
Sandy Springs families often aim for summer closings to align with the school calendar. That creates seasonal spikes that affect competition and inventory. Your offer strategy may need to be more decisive in late spring and early summer.
Neighborhood micro-markets move at different speeds. Proximity to GA-400, parks, and amenities can influence days on market. Ask your agent for neighborhood-specific timing and plan your lender approvals to match realistic closing windows.
If you want current statistics like median price or days on market, check local MLS data and relevant market reports before you finalize pricing and dates. Align your bridge term with those trends, plus a buffer.
Move forward with confidence
A bridge loan can give you the freedom to buy the right home in Sandy Springs without two moves. The key is disciplined budgeting, a strong sale plan, and careful coordination across lender, title, and agent teams. With the right guidance, you can close on your next home, then sell on your timeline and with less stress.
If you are weighing a bridge loan or an alternative, let a local expert map your options and timing. Connect with Jennifer Henley for concierge guidance, a data-backed sale plan, and coordinated closings that protect your family’s schedule.
FAQs
How long do bridge loans typically last for Sandy Springs buyers?
- Most terms run a few months to one year. Exact timelines depend on the lender and your sale plan.
Will a bridge loan affect my purchase loan approval?
- Yes. Lenders underwrite the bridge and purchase together, using your combined payments to calculate DTI and reserve needs.
Is bridge loan interest tax-deductible if I buy first and sell later?
- Possibly. Deductibility depends on how funds are used and current tax law. Consult a tax professional for guidance.
What happens if my current home does not sell before the bridge matures?
- You may need to extend or restructure the loan, refinance, or adjust your pricing strategy. A backup plan is essential.
Are contingent offers competitive in Sandy Springs?
- Often less so in the more competitive North Fulton micro-markets. A non-contingent offer supported by a bridge or HELOC can be stronger.
