Is a Bridge Loan a better option than a HELOC when buying property in Naples?

Bridge Loan

• Purpose: Provides short-term financing to “bridge” the gap between buying a new property and selling your current one.

• Advantages:

  • Immediate lump sum funding

  • Enables competitive, non-contingent offers in Naples’ fast-moving market

  • Useful if you’re confident your current home will sell quickly

• Disadvantages:

  • Higher interest rates (often 7–12%)

  • Short repayment terms (6–12 months)

  • Risk if your existing property doesn’t sell as expected

?? HELOC (Home Equity Line of Credit)

• Purpose: A revolving line of credit secured by your home’s equity.

• Advantages:

  • Lower interest rates (often 6–9%)

  • Flexible withdrawals and repayment terms (draw period 5–10 years, repayment up to 20 years)

  • Can be used for renovations or other expenses beyond the purchase itself

• Disadvantages:

  • Slower setup compared to a bridge loan

  • Variable interest rates can increase over time

  • Requires sufficient equity in your current home

??? Naples Market Context

• Naples is a competitive real estate market, especially for luxury properties.

• Sellers often prefer non-contingent offers, which bridge loans make possible.

• HELOCs are attractive for buyers who have time to prepare and want lower costs.

? Bottom Line

• Bridge Loan = Better if speed and certainty are critical. It allows you to act quickly and make strong offers in Naples’ competitive market.

• HELOC = Better if affordability and flexibility matter more. It’s a cost-effective option if you have time to arrange financing and want longer repayment terms.

Answer: A bridge loan can be the better option in Naples if you need immediate financing to secure a property before selling your current home. However, if you value lower costs and flexible repayment, a HELOC may be the smarter choice.