What is a bridge loan?
Answered by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
A bridge loan is short-term financing that lets you buy a new home before your current one sells, using your existing equity for the down payment. It's repaid when the old home closes.
Bridge loans carry higher rates and fees because they're temporary, but they let you make a non-contingent offer. We'll compare a bridge loan to a HELOC and tell you which is cheaper for your move.
Short-term gap financing
A bridge loan is a short-term loan that helps you buy a new home before selling your current one. It taps the equity in your existing home to fund the down payment on the next.
You repay it once your current home sells, usually within a year.
When it helps
A bridge loan is useful in a competitive market where you cannot make an offer contingent on selling first. It lets you move on your own timeline.
The trade-off is carrying costs until the sale closes. Reach out and we will see if a bridge loan fits your move.