what is a bridge loan in real estate

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A bridge loan in real estate is aloan secured against property which allows the owner to borrow against their existing equity in order to purchase a new property. Once the new property is purchased the previous property is sold which pays off the bridge loan.

People also ask


  • What is a bridge loan?

  • A Way to Buy a New Home Before You Sell the Old One What is a bridge loan? As the name suggests, bridge loans offer a short-term loan or 渂ridge?that allows borrowers to purchase new real estate property by using the home they currently own as collateral.

  • What happens to my bridge loan when I Sell my House?

  • Once your home sells, you pay off the bridge loan and then apply for a new longer-term mortgage with a more favorable interest rate to refinance just your new home.

  • What is home bridge financing and how does it work?

  • Home bridge financing is used most often when a homeowner plans to buy a new home before selling their current one. In these situations, a bridge loan may be a good fit: You found a new home but the seller won accept a contingency offer to sell your current home.

  • Are bridge loans 2% higher than fixed-rate loans?

  • While interest rates can vary, let look at the implications of having a bridge loan with an interest rate that 2% higher than on a standard, fixed-rate loan.

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