Bridge Loans
Buy Your Next Home Before You Sell Your Current One
Sometimes the timing of buying and selling doesn't line up perfectly. A bridge loan may provide short-term financing that helps you purchase your next home before your current home is sold.
This can be especially helpful when you've found the home you want but don't want your purchase to depend entirely on closing the sale of your existing property first.
How a Bridge Loan May Help
Depending on the program and your financial situation, bridge financing may help you:
Access equity from your current home
Make a down payment on your next home
Purchase before your existing home sells
Reduce the need for a home-sale contingency
Coordinate the timing between two real estate transactions
Bridge loans are intended to be temporary financing. The repayment strategy—often involving the sale of the existing property—is an important part of determining whether this option makes sense.
How Bridge Financing Works
A bridge loan is designed to provide temporary financing during the period between purchasing your next home and selling your current home.
Depending on the loan program, available equity in your existing property may be used to help provide funds needed for the new purchase.
A Typical Bridge Loan Scenario
For example, you:
Own a home with available equity.
Find your next home before your current home sells.
Use bridge financing to help complete the new purchase.
Sell your existing home.
Use proceeds from that sale to repay the bridge financing, according to the loan terms.
Qualification Is Important
Because you may temporarily have obligations associated with both properties, the lender will review your overall financial situation, available equity, credit, income, assets, and the planned repayment of the bridge loan.
When a Bridge Loan May Make Sense
Bridge financing may be worth considering when:
You've found the home you want before selling your current home
You have substantial equity in your existing property
You want to make an offer without a home-sale contingency
You need access to funds for the down payment or closing on your next home
You expect your current property to sell within a reasonable period
The timing of your purchase and sale makes traditional financing difficult
Is a Bridge Loan Right for Everyone?
Not necessarily. Bridge financing is generally short-term financing, and the costs, interest rate, repayment terms, and risks should be considered carefully.
Before moving forward, we'll look at the equity in your current home, expected sale proceeds, new-home purchase price, monthly obligations, and exit strategy.
Compare the Alternatives
A bridge loan is only one way to coordinate a purchase and sale. Depending on your situation, there may be other financing strategies available.
The goal isn't simply to make the purchase possible—it's to determine which financing strategy makes the most sense for your overall move.
Ready to Buy Before You Sell?
If you've found your next home but haven't sold your current property yet, bridge financing may help you move forward without waiting for the two transactions to line up perfectly.
We'll review:
Your current home's estimated value and mortgage balance
Available equity
Expected proceeds from the sale
Purchase price of your next home
Funds needed for down payment and closing
Your ability to carry the financing during the transition
Your expected timeline for selling the existing home
Let's See If Bridge Financing Fits Your Move
Before committing to short-term financing, we'll compare the numbers and determine whether a bridge loan or another financing strategy better fits your situation.
Bridge loan programs, terms, rates, fees, equity requirements, repayment provisions, and availability vary by lender and program. All loans are subject to credit approval, underwriting guidelines, property eligibility, and applicable program requirements.