Get a no-cost quote on bridge loan financing to make your move without the timing stress.
A bridge loan is short-term financing that helps homeowners purchase a new home before selling their current property. Instead of making your new home purchase contingent on selling first - which can weaken your offer in competitive markets - a bridge loan provides the funds you need to buy now and sell later.
Bridge loans are typically structured for 6 to 12 months, giving you time to move into your new home, prepare your old home for sale, and sell without the pressure of simultaneous closings. Once your previous home sells, you use the proceeds to pay off the bridge loan.
For homeowners in competitive markets where contingent offers are often rejected, or those who need to relocate quickly for work, a bridge loan can be the difference between getting your dream home and losing it to another buyer.
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Here's how the bridge loan process works:
Lenders will evaluate your current home's market value, how quickly it's likely to sell, and your overall financial picture. Because bridge loans are short-term and carry more risk, interest rates are typically higher than traditional mortgages. You should have a clear plan for selling your current home within the loan term.
Bridge loan amounts are typically based on your current home’s equity. Most lenders will lend up to 80% of your current home’s value minus your existing mortgage balance. For example, if your home is worth $500,000 and you owe $200,000, you might qualify for up to $200,000 in bridge financing.
Bridge loan rates are typically higher than traditional mortgage rates, often 2-4% above prime rate. This reflects the short-term nature and higher risk of these loans. However, because the loan term is short (6-12 months), the total interest paid is manageable. Some borrowers can make interest-only payments during the bridge period.
This is the key risk with bridge loans. If your home doesn’t sell within the loan term, you may need to extend the loan (often with additional fees), reduce your asking price to accelerate the sale, or explore other options. Work with your lender to understand extension options before closing.
Yes. Alternatives include home equity lines of credit (HELOC), making a contingent offer, negotiating a rent-back agreement with your buyer, or using an 80-10-10 loan structure. Some buyers also use cash-out refinancing on their current home. Each option has trade-offs depending on your situation.
Bridge loan interest may be tax-deductible as mortgage interest if the loan is secured by your home. However, tax laws are complex and subject to change. Consult with a tax professional about your specific situation.
Bridge loans can often be approved quickly - sometimes within 1-2 weeks - because they’re based primarily on your current home’s equity rather than extensive income documentation. This speed is one of their key advantages when you need to move fast on a new purchase.
Mortgage rates change every day, and your rate will vary based on your location, finances, and other factors. Get your FREE customized rate comparison below:
