What Is a Bridge Loan in Real Estate?

A bridge loan is a short-term loan that helps homeowners or investors “bridge” the financial gap between buying a new property and selling their existing one. These loans offer fast funding and temporary liquidity during transitions.

✅ How a Bridge Loan Works

Bridge loans provide short-term financing—typically 6 to 12 months—to help borrowers secure a new property before selling an old one. They are often interest-only and allow quick access to cash.

  • Short-term financing (usually under 12 months)
  • Fast approvals and funding
  • Often interest-only payments
  • Secured by existing or new property

💡 When a Bridge Loan Makes Sense

A bridge loan is ideal when you need temporary cash or fast access to funds during a real estate transition. Common scenarios include:

  • Buying a new home before selling your current one
  • Needing fast liquidity for repairs or upgrades
  • Investors securing deals with quick closings
  • Covering down payments while waiting for sale proceeds

Investors often use bridge loans before refinancing into a DSCR loan or portfolio mortgage.

📉 Risks of Bridge Loans

  • Higher interest rates compared to conventional loans
  • Short payoff timelines
  • May require strong equity or collateral
  • If your home doesn’t sell, repayment becomes difficult

If you need fast, short-term capital for investment projects, consider comparing bridge loans with hard money loans.

🏠 Need fast financing to bridge the gap between buying and selling?

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