Buying your next home in Chevy Chase before you’ve sold your current one can feel like threading a needle. You see the right house, but your equity is tied up and you want to avoid a contingent offer. You are not alone. Many move-up buyers in Montgomery County use short-term “bridge” financing to unlock their equity and keep their purchase timeline on track.

In this guide, you’ll learn what a bridge loan is, how it works, what it costs, and how to minimize risk and carrying costs in Chevy Chase. You’ll also see practical timing strategies, a checklist to prepare, and what to ask lenders. Let’s dive in.

What is a bridge loan?

A bridge loan is short-term financing that helps you buy your next home before you sell your current one. It “bridges” the gap by giving you temporary access to your equity so you can make a strong offer and close with confidence.

Bridge financing is popular with move-up buyers who want to avoid sale contingencies or missing out on a home while they prepare their current property for market.

Traditional bridge loans explained

How they work

A traditional bridge loan is typically secured by your current home. You receive funds for the down payment or full purchase, then repay the loan when your existing home sells.

• Term length is usually short, often 3 to 12 months.
• Payments are often interest-only while the loan is outstanding, with the principal due when you sell.
• Lenders usually secure a lien on your current property. Some products use the new property or both as collateral.

Eligibility and underwriting

Lenders look for a strong equity position and the ability to carry debt during the overlap period. Expect a review of:

• Loan-to-value on your current home and overall equity.
• Debt-to-income to gauge capacity to carry two housing payments if needed.
• Credit, assets, and documentation for the purchase and sale.
• Appraisal requirements for the current home and sometimes the purchase.

Costs to expect

Bridge loans are short-term and risk-priced, so rates and fees are usually higher than a standard mortgage. Common costs include:

• Interest charges during the term.
• Origination and administrative fees.
• Appraisal and closing costs specific to the bridge loan.
• Possible extension fees if your home takes longer to sell.

Is a bridge loan right for Chevy Chase buyers?

When it can help

A bridge loan can be a smart tool if you want to:

• Make a non-contingent offer in a competitive Chevy Chase market.
• Buy now while preparing your current home for listing and showings.
• Align closings so you move once and avoid temporary housing.

Risks to consider

All short-term financing has tradeoffs. Be clear-eyed about:

• Carrying two mortgages if the sale takes longer than planned.
• Sale price risk if you need to reduce price to sell within the loan term.
• Lien and foreclosure risk if you default on the bridge loan.
• The complexity of coordinating two closings on tight timelines.

Program options to explore

Traditional lenders and alternatives

You can compare several paths:

• Traditional secured bridge loans from banks, credit unions, or specialty lenders.
• A home equity line of credit or home equity loan if you can qualify and draw funds in time.
• Cash reserves or liquidating investments if that fits your financial plan.
• A cash-out refinance, which may carry lower rates but longer timelines and higher closing costs.
• Contingent offers or a rent-back arrangement to smooth your move.

Compass program note

Compass has partnered with providers to offer programmatic bridge advances in select situations. Program details, eligibility, and state availability can change. If you want to explore Compass’s Bridge Loan Advance by Notable, plan to verify the current terms directly with the program provider and obtain written disclosures before you decide. A trusted advisor can help you compare that option with traditional bridge loans and HELOCs based on your timeline, equity, and budget.

Timing strategies that work locally

Chevy Chase is a high-value, close-in market where well-prepared listings can move quickly, but time on market varies by price point and condition. Smart timing reduces risk and cost.

Before you write an offer

• Get a pre-approval that reflects your bridge financing or ability to carry two mortgages.
• Estimate total cash needs, including down payment, closing costs, and bridge fees.
• Start preparing your current home early with pricing strategy, staging, and listing production to accelerate your sale once you go live.

Structuring your contract

• Keep contingencies as tight as you can while protecting your interests.
• Use a financing plan you are confident you can secure within the contract timeline.
• Consider negotiating a post-closing occupancy. A short rent-back from your buyer can create breathing room between closings.

Ways to reduce duration and cost

• Price your current home competitively and invest in high-impact presentation to drive early interest.
• Pre-market to qualified buyers through agent networks to build momentum before launch.
• Coordinate lender, title, and inspection timelines so your sale closes soon after your purchase.
• Choose interest-only bridge structures to keep cash flow manageable.
• Ask about extension options upfront and compare the cost with alternatives like a HELOC.

Documents you will need

Prepare a clean file to speed underwriting. Most lenders ask for:

• Income verification such as recent pay stubs and W-2s, or tax returns if self-employed.
• Bank and asset statements showing reserves.
• Your current mortgage statement and proof of equity.
• The purchase contract for your new home.
• A listing agreement or sales contract for your current home if available.
• Credit authorization and valid ID.

Local recording, taxes, and disclosures

In Maryland, mortgages and liens are recorded at the county level. For a bridge loan secured by your current home in Montgomery County, coordinate with your title company or a real estate attorney to confirm recording procedures and timing. Be aware of Maryland and county transfer and recordation tax rules and how they apply to your purchase and sale. Short-term financing can affect your cash flow and timing, so discuss tax considerations with your advisor before closing.

Quick checklist for Chevy Chase move-up buyers

Use this to stay organized:

• Get a pre-approval that reflects bridge financing or dual-payment capacity.
• Request quotes from multiple lenders, including term, interest structure, fees, and extension terms.
• Verify any program product terms directly with the provider and obtain written disclosures.
• Confirm lien recording and title steps with your Montgomery County title company.
• Build an exit plan with a target sale price and realistic timing.
• Budget for both transactions’ closing costs, appraisals, and potential pre-list repairs.
• Keep a contingency reserve for one to three extra months of housing payments.
• Align listing prep and marketing to minimize your bridge loan duration.

Next steps

If you are weighing a bridge loan, start with a clear plan for financing, pricing, and timing. A coordinated approach helps you buy with confidence and sell efficiently.

Ready to map your path from here to your next Chevy Chase home? Request a complimentary market plan and staging consultation with the Dana Rice Group. Our team can help you compare financing paths, prep your current home for a fast, polished launch, and coordinate both closings with less stress.

FAQs

What is a bridge loan for homebuyers?

• A bridge loan is short-term financing that lets you buy your next home before you sell your current one by temporarily unlocking your equity.

How long do bridge loans typically last?

• Most terms run 3 to 12 months, with some products offering extensions if your sale takes longer than expected.

What does a lender review for bridge loan approval?

• Lenders evaluate equity in your current home, your debt-to-income ratio, credit, assets, and documentation for your purchase and sale.

What are common bridge loan costs?

• Expect interest charges, origination and administrative fees, an appraisal, closing costs, and possible extension fees if needed.

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

• You may need an extension, a refinance into a different loan, or to adjust your sale strategy to meet the payoff timeline.

Are there alternatives to a bridge loan?

• Yes. Consider a HELOC or home equity loan, cash reserves, a cash-out refinance, a contingent offer, a rent-back arrangement, or carrying two mortgages if your budget allows.

How are liens handled in Montgomery County, Maryland?

• Bridge loans secured by your current home are typically recorded as liens at the county level, so coordinate steps and timing with your local title company or attorney.

Can I use a programmatic bridge advance through Compass?

• Compass offers access to programmatic bridge advances through partners in some cases. Verify current eligibility, terms, and state availability directly with the provider before you commit.