Bridge financing is a short-term loan that helps homeowners cover the gap between buying a new property and receiving the funds from their sale. It provides flexibility when your purchase closes before your sale.
Here is how it works. The lender advances you the equity from your existing home that will soon be available once your sale closes. This allows you to use those funds for your next down payment without waiting for the proceeds to arrive.
Bridge loans are usually secured by your current property and are meant to be repaid within 30 to 90 days once your sale completes. The interest rate is slightly higher than a traditional mortgage, but the convenience often outweighs the cost.
To qualify, you need a firm purchase agreement for your new home and a firm sale agreement for your existing one. Lenders will also review your income, credit, and debt ratios.
Bridge financing is ideal for sellers moving into competitive markets where timing can make the difference between getting or losing your next home.
Wondering if bridge financing could help you transition smoothly?
I can connect you with reputable mortgage professionals who will outline your options clearly.