A short-term loan that covers the gap when you buy a new home before selling your current one.
Bridge loans are typically 30 to 90 days and are secured against your existing property. They cover the down payment and closing costs on your new purchase until your current home sale closes. Bridge financing rates are higher than regular mortgage rates (typically prime + 2% to prime + 4%). Not all lenders offer bridge financing, and you typically need a firm sale agreement on your current property to qualify.
Related terms: Closing Costs | Mortgage Pre-Approval