What Is a Bridge Loan—and Is It Right for You?

By Sold Realty Group

If you’re thinking of buying a new home but need the funds from your current one to do it, you’re not alone. Many homeowners feel stuck in the “buy first or sell first?” dilemma—especially in a fast-moving market where you don’t want to lose your dream house waiting for your current one to close.

That’s where a bridge loan can come in.

At Sold Realty Group, we often help clients explore bridge loans as a strategic tool to make their next move possible. Here’s a straightforward look at what bridge loans are, how they work, and how to decide if one might be the right fit for you.

💡 What Is a Bridge Loan?

A bridge loan is a short-term financing option designed to “bridge the gap” between buying your new home and selling your current one.

It gives you access to the equity tied up in your existing house so you can:

✅ Make a down payment on your next home
✅ Avoid the stress of timing both closings perfectly
✅ Move without having to sell first (or risk temporary housing)

Think of it as a temporary loan that’s paid off when your current home sells.

🏠 How Does a Bridge Loan Work?

Typically, a bridge loan allows you to borrow against the equity in your current home. Here’s how it usually looks:

• It’s a short-term loan, often 6 to 12 months.

• Your lender gives you the funds you need for the down payment on your new home.

• Once your current home sells, the proceeds pay off the bridge loan.

✅ This means you can buy first, move in, and then focus on selling without juggling two mortgages long term.

🔍 Pros of Using a Bridge Loan

✔️ Buy Before You Sell

You won’t have to scramble to find a new home under pressure once your house goes under contract. This is huge in competitive markets where desirable homes get snapped up quickly.

✔️ Avoid Contingencies

Offers contingent on selling your existing home can be less attractive to sellers. A bridge loan lets you present a stronger offer, without that contingency.

✔️ Easier Move

You can close on your new home, move out, and then list your old house while it’s empty and show-ready—no stress of constant cleanings around daily life.

⚠️ Things to Consider About Bridge Loans

💰 Costs & Rates

Bridge loans often come with slightly higher interest rates and fees than standard mortgages, since they’re short-term and carry more risk for lenders.

📆 You’ll Be on a Time Clock

Most bridge loans expect repayment within 6-12 months. If your existing home doesn’t sell as quickly as planned, this can add pressure.

📝 You Still Have to Qualify

You’ll need to show you can afford the payments, at least temporarily, on both properties. Not everyone will meet the income or credit requirements for a bridge loan.

✅ Good news: Many lenders calculate this differently if your current home is already under contract, or if there’s a strong local market (like ours in the Southeast Valley) where homes don’t sit long.

🎯 Is a Bridge Loan Right for You?

Bridge loans are often a smart solution if:

✅ You have substantial equity in your current home.
✅ You’re shopping in a hot market and want to secure your next property quickly.
✅ You want to avoid contingent offers and stand out to sellers.
✅ You’re confident your home will sell soon—especially with our local market insights and staging support.

But they might not be the best fit if:

🚩 You have limited equity, making it hard to borrow enough.
🚩 Your finances would be strained by even temporary dual payments.
🚩 You’re in an area with slower home sales, increasing the risk of holding costs.

🏡 Bottom Line: It’s a Powerful Tool—With the Right Guidance

A bridge loan can make the difference between buying your next dream home on your timeline vs. juggling offers, temporary rentals, or stressful contingencies. But like any financial tool, it’s important to use it wisely.

At Sold Realty Group, we partner with experienced local lenders who can walk you through your options—so you’ll know exactly what your payments and timelines would look like.

🎯 Wondering If a Bridge Loan Could Work for You?

📞 Let’s talk! We’ll review your home equity, the current market, and your goals to see if a bridge loan (or another strategy) makes the most sense.

✨ Move forward with confidence, knowing you have a smart plan and a team that’s always on your side.