If you are a homeowner in Cherry Hill, Voorhees, Mount Laurel, Marlton, or anywhere in South Jersey, you have probably seen how common it is to use a HELOC (home equity line of credit) to fund the next move.

Here is the problem I keep seeing in real life. Homeowners pull equity out, buy another property, and then plan to sell the current home “soon.” But the market does not always agree with the price in your head, or the payoff number on your HELOC statement.

I have recently had two sellers in this exact situation. Both used a HELOC to buy other properties and then wanted to sell their current home. One seller broke even. The other had to bring about $20,000 to the settlement table because the final sale price did not cover everything.

This is avoidable.

The part many homeowners miss about HELOCs and selling

A HELOC is tied to your home. When you sell, it has to be paid off at closing, just like your primary mortgage.

So even if you list your home and it sells, the math can get ugly fast if the market value is lower than expected, or if closing costs eat up more than you planned. If the sale proceeds are not enough to cover your mortgage, your HELOC balance, and typical seller costs, you may need to bring cash to close.

Why this turns into “no offers,” “low offers,” or “bring money to closing”

When homeowners tap equity first and sell later, they are counting on a specific price to bail out the plan.

But buyers decide value, not us.

Here is what can go sideways:

• The home is overpriced for the current market, so showings are light and offers do not come in.

• A buyer’s appraisal comes in low, forcing a price reduction, renegotiation, or a canceled contract.

• Your net proceeds shrink once you factor in commissions, transfer tax, title, attorney, repairs, credits, and the HELOC payoff.

• You feel trapped because you already used the HELOC funds to buy the next property, so dropping the price is painful.

This is exactly how “I will have plenty of equity” becomes “I am breaking even” or “I have to bring money to settlement.”

The safer option: sell first, then buy (with protection)

If you want the least stressful version of this, the safer sequence is:

1. Put your house on the market first (priced correctly, prepped properly).

2. Get a signed contract.

3. Buy the next home contingent upon your sale.

That is the “horse before the cart” version. It gives you a real sales price, a real timeline, and a real net number before you commit.

Yes, contingent offers can feel less competitive. But they can also protect you from becoming the person who has to bring $20,000 to closing.

If you must remove the contingency, here are options to discuss

Every situation is different, so use these as conversation starters with your lender and financial advisor, not as one size fits all instructions.

Bridge loan options

A bridge loan is a short term loan designed to help you buy a new home before selling your current one.
Some lenders structure these in different ways, and many want to be involved in your next mortgage too.

Key point: bridge loans can be helpful, but they are still debt with real costs. Make sure you understand rates, fees, and the payoff timeline before signing.

Borrowing from a 401(k)

Some plans allow loans, and the Internal Revenue Service rules limit the maximum loan amount (often 50% of your vested balance or $50,000, whichever is less, with some exceptions).
Also confirm repayment terms and what happens if you leave your job.

Taking money from an IRA

You can take distributions, but they may be taxable and could trigger an additional 10% tax if you are under age 59½, unless an exception applies.
This is where a quick call with your CPA can save you a big surprise.

A simple way to avoid the HELOC surprise: run the numbers first

Before you pull equity with the plan to sell “soon,” do this:

• Get a realistic pricing range (not a hopeful number).

• Ask for a seller net sheet that includes: mortgage payoff, HELOC payoff, typical closing costs, and a conservative repair/credit budget.

• Stress test the price: “If we sell for $25,000 less than my target, what happens?”

• Have an exit plan if offers come in lower than expected.

If that stress test shows you might break even or bring money to closing, that is your warning sign to slow down and rethink the sequence.

FAQ for South Jersey homeowners

Can I sell my home if I have a HELOC?
Yes. The HELOC does not prevent a sale, but it must be paid off at closing, which reduces your proceeds.

What if my sale price does not cover the mortgage and HELOC?
You may need to bring cash to closing or explore alternatives with your lender.

Are bridge loans common for buying and selling at the same time?
They are an option some buyers use to compete and to avoid a sale contingency, but terms vary widely by lender.

My takeaway: do not let a HELOC force your list price

If you are thinking about using a HELOC as a stepping stone to your next home, please do not guess at your future sale price. Get the value right first, then plan the financing around real numbers.

If you want, I can put together a quick, realistic pricing range and a seller net sheet style estimate so you can see what selling would look like before you pull the equity and commit to the next purchase.

Friendly note: This article is educational, not financial or tax advice. Talk with your lender, CPA, or financial advisor about what fits your situation.