Bridge Financing: Seamlessly Manage Your Home Buying Gap

When taking out this type of loan, borrowers must make sure they have enough money left over after paying off all costs associated with selling their current house to pay back the bridge loan.

You don’t have to miss out on purchasing your dream home because you want your current home to close to get the required down payment funds. Bridge financing allows you to use the equity in your existing property to raise the money needed to complete your new property while waiting for the closing of the property. 

 In this case, you can take out a bridge loan against your current home’s equity to cover the down payment on your new home. 

A bridge loan is short-term financing, usually between six to 12 months. All you want now is the money to bridge the gap between the new home purchase and the sale of your old home. 

Although your existing home secures the bridge financing loan, the interest rate on this type of home loan is still a little higher than those on a standard mortgage, HELOC, or home equity loan because of the short loan term.