What Is a Bridge Loan, and When Might I Need One?
- By Jim Blackburn
- on
- Bridge Loans, Buy A House, Cash-Out Refinance, Financial Planning, Sell A House
1. A Bridge Loan Helps You “Bridge” the Gap Between Homes
A bridge loan is a short-term financing tool that lets you use the equity in your current home to help purchase your next one.
Here’s how it works:
You borrow against the equity in your current home
Use that money as a down payment on your new home
Pay the loan off once your existing home sells
It’s like borrowing time and money—just long enough to make a smooth transition.
Want to see exactly how a bridge loan works for your situation? Calculate your Bridge Loan, Capital Gains Tax Exclusion & Payment Recast now to understand your borrowing capacity, tax implications, and how your payment adjusts once your old home sells.
2. It’s Useful When You Need to Buy Before You Sell
Bridge loans can be a lifesaver if:
You’ve found your dream home and need to act fast You haven’t sold your current home yet You don’t want to make a contingent offer (which sellers may reject) You can’t afford two mortgages at once
It gives you buying power and flexibility—especially in a competitive market where timing matters.
Before deciding on a bridge loan, explore your complete selling strategy. Visit our Sell a House page to understand your options for timing, pricing, and coordinating the sale with your new purchase.
Once you’re ready to buy your new home, see what your monthly payment will look like. Calculate your Conventional Purchase Loan Payment now to budget for your new home while planning your bridge loan payoff timeline.
3. Be Aware: Bridge Loans Are Short-Term and Come at a Cost
Bridge loans are meant to be repaid quickly—usually in 6 to 12 months. That means:
Higher interest rates than a typical mortgage Possible fees and closing costs Best used when you’re confident your current home will sell soon
Have a clear exit strategy before jumping in—because the “bridge” needs to lead somewhere solid.
If the bridge loan’s short-term costs concern you, consider a cash-out refinance as an alternative. Calculate your Conventional Cashout Refinance Loan Payment now to see if tapping your equity with a longer-term loan might work better for your situation.
Thinking of Buying Before You Sell? Let’s See If a Bridge Loan Fits
At Stairway Mortgage, we help you make your next move without missing a step—because the right loan makes all the difference.
📘 Download our homebuyer guides about bridge loans and move-up strategies.
📊 Check Current Rates for bridge loans and conventional options.
🧮 Run the numbers with our Bridge Loan Calculator.
🏠 Plan your sale on our Sell a House page.
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