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Bridge Loans

Bridge Loans: Buy the Next House Before Selling This One

A sale contingency is the weakest thing in an offer. A bridge loan removes it by turning the equity you already own into a down payment today.

Talk through a bridge 302-600-3197

A bridge loan is short term financing secured against the home you are leaving, sized so the proceeds can cover the down payment and closing costs on the home you are buying. It exists to fix a sequencing problem. Your equity is real, but it is locked inside a property that has not sold yet, and sellers in a tight market will not accept an offer that depends on that sale happening. The bridge releases the equity early, the new purchase closes on its own schedule, and the entire balance is retired from the settlement statement when the old house finally sells. Terms are typically six to twelve months, interest only, with no prepayment penalty, since the lender fully expects an early payoff. The pieces that determine whether it works are the equity position in the departing home, the realistic time on market for that property, and whether the permanent loan on the new home has already been approved. We underwrite both sides together so nothing surprises you at the second closing.

Who it's for

  • Move up buyers with strong equity who keep losing to offers without a sale contingency
  • Families relocating for work who must be in the new market before the current home lists
  • Sellers who want to make repairs or stage an empty house rather than show it while living in it
  • Buyers of new construction whose delivery date does not line up with a settlement they control
  • Investors sequencing an acquisition ahead of a disposition inside the same portfolio

Why choose this loan type

  • A clean, non contingent offer competes on the same footing as cash in a multiple offer situation
  • You move once instead of twice, avoiding a rental, a storage unit, and two rounds of packing
  • Interest only payments and available interest reserves keep the overlap period manageable
  • No prepayment penalty, so selling faster than projected simply costs you less

Frequently asked

Will I be carrying two mortgage payments at once?+

Sometimes, and sometimes not. Many bridge programs build an interest reserve into the loan so the departing residence carries itself for the first several months, or defer payments entirely until the sale closes. Which structure you get depends on the equity in the old home and how much of it the bridge is tapping.

How much equity do I need in my current home?+

Enough that the combined balances stay inside the program's ceiling, usually around 80% of the departing property's value. A home worth $500,000 with a $250,000 mortgage typically supports a bridge in the neighborhood of $150,000 after that limit and closing costs are applied.

What if my current home takes longer than expected to sell?+

Most bridge notes run six to twelve months with an extension option, which absorbs a slower market. The real protection is pricing the departing home correctly from day one. We look at recent local absorption times before recommending the loan so the term matches reality rather than optimism.

Map out both closings

Tell us your current home's value and balance plus the price range you're shopping. We'll show you what the bridge frees up and what the overlap costs.

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