Bridge Loans
A bridge loan is short-term financing secured by the home you own now, so you can buy your next home before the current one sells. It lets you make an offer without a home sale contingency, and it is repaid when your current home closes.
Justin Lazzaro, NMLS #1229453 | Reasy Financial, LLC, NMLS #2446155 | Licensed in Arizona, Pennsylvania, Florida, and Texas
Who a bridge loan fits
Bridge financing solves a timing problem. It works when the equity is there and the home you are leaving will sell.
Move-up buyers with substantial equity
The equity in your current home is what funds the down payment on the next one.
Buyers in competitive markets
An offer that does not depend on selling your home first is stronger than one that does.
Who it usually does not fit
With thin equity, or a home that may be slow to sell, the cost and the risk usually outweigh the convenience.
How a bridge loan works
1
We size the equity in your current home
The lender values the home you are selling and decides how much it will lend against it.
2
The bridge funds your purchase
Depending on the program, it pays off your existing mortgage and releases cash, or it sits behind your current mortgage as a short-term second loan.
3
The sale pays it off
When your current home sells, the proceeds repay the bridge loan. The mortgage on your new home is a separate, long-term loan.
Structures differ by lender. Some have no monthly payment and one balloon payment at the end. Others are interest-only. Availability varies by state, and some bridge and buy-before-you-sell options are not available or are limited in Texas.
There is more than one way to buy before you sell.
| Option | How it works | Worth knowing |
|---|---|---|
| Bridge loan | Short-term loan against your current home | Fees are meaningful, and the clock is running until the home sells |
| Buy-before-you-sell program | A third-party company advances part of your equity for the new purchase. Some also make a backup offer on your current home | The fee is based on the price of your home, not on how much equity you use, and the lender on your new loan has to accept the program |
| HELOC on your current home | A credit line opened before you list the home | Usually costs less, and it has to be in place before the home goes on the market |
| Home sale contingency | Your purchase depends on your sale closing | No extra loan cost, and a weaker offer |
| Qualifying with both payments | You carry both mortgages until the sale | Requires the income to support both |
Three things to know before you apply
1
It is not cheap
Some programs charge origination fees and interest. Others charge a program fee based on the price of your home, whether you use a little of your equity or a lot. I will show you the full cost next to the alternatives before you choose.
2
The exit is the sale
If the home takes longer to sell than planned, the loan can come due. Price and prepare the home as if the deadline matters, because it does.
3
You still qualify for the new mortgage
The lender on your new home decides how the bridge loan and your current mortgage count. Some programs are built to take the current payment out of the calculation, and not every lender accepts them.
Guidelines change. I confirm current requirements with the lender before quoting anything.
Common questions about bridge loans
Short answers to common questions. Program rules vary by lender, so treat these as general guidance, not a loan decision.
How long does a bridge loan last?
They are short-term, typically measured in months. The exact period depends on the lender.
Do I make payments during the bridge?
Some programs have no monthly payment and collect everything at payoff. Others require interest-only payments.
What if my home does not sell in time?
With a traditional bridge loan, you would need to extend it if the lender allows, refinance, or pay it off another way. Some buy-before-you-sell programs include a backup offer to buy the home if it has not sold within a set period. We talk through that risk before you commit.
Do I need to list my home first?
Requirements differ. Some programs want a listing agreement in place, and some lend before the home is listed.
Is a HELOC a better choice?
Often it costs less. It has to be opened before you list the home, and the payment counts when you qualify for the new mortgage.
Where do you offer bridge loans?
I am licensed in Arizona, Pennsylvania, Florida, and Texas. Bridge options differ by state, so I confirm what is available for your property.
Ready to talk it through?
Pick a time that works for you. We'll go over your goals and next steps, no pressure, just a conversation. Prefer to call or text instead? Reach me directly at (412) 638-4982, or book a quick Zoom if that's easier.
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Licensing
Justin Lazzaro, NMLS #1229453
Reasy Financial, LLC, Company NMLS #2446155
AZ Mortgage Banker License BK #2012302
FL Mortgage Broker License MBR6883
PA Mortgage Broker License 107748
TX Mortgage Company License 2446155
Licensed in Arizona (LO-2001846), Florida (LO71883), Pennsylvania (73668), and Texas
Contact
14100 N 83rd Ave, Suite B-230
Peoria, AZ 85381
