Bridge Loans:

What a Bridge Loan Is:

A bridge loan, often referred to as “Buy Before You Sell Program,” is short-term financing — typically six to twelve months — that lets you borrow against the equity in your current home before it sells, so you can buy your next home first. It bridges the gap between two transactions that don’t naturally line up in timing.

Simply: a bridge loan gives you access to your home’s equity now, without waiting for closing. The loan gets paid off when your departing home sells.

Bridge loans are not a single product. They come from different types of lenders, are structured differently, and carry meaningfully different costs and restrictions. Understanding which type of bridge applies to your situation is the whole conversation.

Bridge Loans

At a Glance:

Loan term: Typically 6–12 months; most private money lenders will extend for extenuating circumstances
Typical cost: Ranges from modest (first-mortgage-tied programs) to 2–3+ points, with program fees of 1.9–7% on some consumer platforms
Interest: Usually higher than conventional rates; 9–12% is common depending on loan type
Qualification: Varies significantly by program type; some require full income documentation, others are 100% equity-focused

The Three Types of Bridge Financing — and Why Running the Numbers Matter

Not all bridge products are the same, and the wrong choice can cost you more than the bridge itself. There are three main categories, each with a distinct structure, cost profile, and set of trade-offs.

Lender-Tied Bridge Programs

Some wholesale lenders offer bridge products that are tied to the purchase loan for the new home that they also originate. The bridge financing pulls equity from your departing home for the down payment on the new one. No monthly payments are required; interest is calculated for qualifying purposes only.

What makes these programs appealing:

Lower cost compared to other bridge options
One lender handles both the bridge and the purchase loan, streamlining that aspect of the process
Closing costs can often be rolled into the loan
Terms up to six months, with a renewal option available

The critical trade-off: These programs are captive, which means that you must close with the lender who gives you the bridge. You don’t have control over their rates or whether they are the most competitive for your situation, and you have no flexibility. Qualification can also be very strict — one program, for example, thar offers the bridge near free of charge, requires a maximum combined loan-to-value of 75%, a minimum 680 credit score, and full income documentation qualifying with the total cost for both properties. In most situations, this means your income would have to be near twice the amount needed to qualify, as you must be able to prove the ability to cover the cost of both homes. This single detail knocks many qualified homeowners out of this program.

Bottom line: the lowest-cost bridge option for those who qualify — but you’re buying the whole package, including whatever rate they offer on the new first mortgage without much choice.

Equity-Based Buy-Before-You-Sell Programs

A second category has grown significantly in recent years: equity-access platforms specifically designed around the buy-before-you-sell use case. They each work a little differently — and the differences need to be applied to your unique situation to know which one ends up penciling out most favorable to you.

The general model: the platform advances a portion of your current home’s equity, you buy and move into your new home, then you sell the old one afterward. Some of these programs can back your offer as a cash-equivalent, which is a real advantage in competitive markets.

An example of how the programs can have vastly different costs that may not be evident on the surface is that two providers charge roughly the same: 2.4%. However, one charges based on the selling home and the other on the new home. If you are significantly downsizing, you would lose with the first lender and win with the second. If you are purchasing a more expensive property, especially one quite a bit more expensice, then you would win with the first lender and lose with the second.

The nuances can be complicated and confusing. Some high level notes on various providers can help point out some of the variations you might see:

How some of the major programs compare:

Flyhomes — Bridge loan through affiliate Flyhomes Mortgage. Origination fees up to 2.5%; short-term interest around 9.99% while the loan is outstanding. No mandatory monthly payments — interest accrues to payoff. Their Cash Offer structure can position your offer as cash-equivalent and close in as little as 10 days. You may work with your own agent on the sale. Available in select markets.

Knock — Charges a 2.25% program fee based on your home’s estimated list price, plus approximately $1,850 in closing costs. You keep your own agent and can list on the open market. Up to $35,000 available for pre-sale repairs. Six months to sell; if the home doesn’t sell in that window, Knock will purchase it — though typically well below market value. Available in roughly 26 states.

Orchard — “Move First” equity advance program available in select metros across AZ, CA, CO, GA, TN, TX, WA, and expanding. Program fees range from 1.9% to 7% depending on structure, plus standard brokerage commissions. You must use Orchard’s agents to sell your current home — no flexibility there. Four months to sell.

Homeward — Buy Before You Sell fee starts around 1.9% for the basic equity access structure, but can escalate significantly — up to 7% if Homeward ends up purchasing your home outright. Available in roughly 13 states. Final proceeds can sometimes come in lower than initially projected; understanding the full payout structure before committing is essential.

HomeLight Buy Before You Sell — Equity unlock model; approval in as little as 24 hours. You make a non-contingent offer, move in, then your old home is sold vacant through your own agent. No monthly payments. Available in most states with good agent flexibility.

What these programs have in common: they’re built around equity access, not traditional mortgage underwriting. Each has different fee structures, geographic availability, rules about agent and loan choice, and timelines. The comparison matters more than category — they are all the same type of bridge.

Private Money Bridge Loans

The third category is private money lending — loans funded by private investors or lending funds, secured by real estate, and underwritten outside of conventional guidelines.

What distinguishes private bridge loans:

Speed — qualification can happen within 24 hours. Funding is often in one to two weeks, which means a private money loan can be used in some cases for emmergency finanacing when conventional lending falls through due to unexpected qualification issues
Flexibility — less rigid credit and income requirements; lenders focus primarily on equity in the property
No captive requirement — you can use any lender for your purchase financing
Geographic availability varies by market

What they cost: Rates typically run 9.5% to 12% annually. Origination fees (points) generally range from 1.5 to 3 points. On a $400,000 bridge loan, 2 points is $8,000 upfront. Loan terms are usually 11 to 12 months, though most borrowers pay these off within 3 to 6 months once the departing home sells.

For clients who need speed, or who are in markets where other bridge options aren’t available, private money is often the most expedient path. It also doesn’t restrict your options on the purchase loan side.

The Calculation People Miss

The instinct when hearing “bridge loan” is often to dismiss it as too expensive. That instinct is worth examining more closely — because the math sometimes runs the other way.

The cost of moving twice. If you sell first before securing your next home, you need somewhere to go — temporary housing, storage, and all the disruption that comes with it. The average local move costs roughly $9,000–$10,000. Two moves means $18,000–$20,000 in moving costs alone, which could often pay most or all of a bridge fee, without the significant time and stress of moving twice.

The occupied home discount. This is the piece most people don’t account for. Homes consistently perform better on the market when they’re vacant. Buyers can visualize space more easily. Showings are simpler to schedule. And critically — the seller can fully prep, touch up, and stage the home without navigating daily life around it. Market data consistently shows meaningfully higher sale success rates for vacant homes over occupied ones, with gaps of 8 to 13 percentage points in some tracked markets. That’s can more than make up the cost of a bridge in many cases that runs less than 2-3% on average.

When you sell occupied, it also ties up your schedule for months, keeping the home show-ready every day, and often unable to make the small improvements that actually move the needle on price. When you move first and sell vacant — that’s not only convenient, it’s a strategy that pays.

If a bridge loan costs $10,000–$15,000 all in, and selling vacant versus occupied nets $15,000–$30,000 more in sale price, the bridge hasn’t cost you anything. It has paid for itself.

The real question isn’t whether the bridge costs money. It’s what the full picture looks like when you add everything up.

Often Overlooked Bridge Loan Facts

Most bridge loan interest doesn’t require monthly payments.
It accrues and is paid off when your home sells.

The average local move costs $9,000–$10,000.
Moving twice costs twice that — often more than the bridge loan itself.

Vacant homes statistically sell at a higher success rate than occupied ones
— sometimes by 8 to 13 percentage points in tracked markets.

A bridge loan isn’t always the most expensive option.
For many clients, it’s cheaper than the alternative when you run the full tape.

Some bridge programs require you to use their lender for your purchase loan too
which means the rate on your 30-year mortgage is part of the bridge loan’s true cost.

A non-contingent offer backed by a bridge loan can be as competitive as cash in many markets
— without giving up your financing.

Bridge Loan FAQs

Q: Do I have to make monthly payments on a bridge loan?

A: It depends on the program. Many bridge products — including most equity-access platforms and some private money programs — accrue interest without requiring monthly payments during the bridge period. The full balance is paid off when your departing home closes. Some programs do require interest-only monthly payments, so the structure varies by lender and product type.

Q: Can I use a bridge loan with a conventional purchase loan?

A: Yes, in many cases. Conventional guidelines allow bridge loans when they are not cross-collateralized and when your ability to carry both properties is properly documented. If that documentation creates a debt-to-income problem, equity-based bridge structures that remove the departing home payment from DTI may be a better fit.

Q: What credit score is needed for a bridge loan?

A: It depends significantly on the type of bridge. Lender-tied programs like Windsor typically require a minimum 680. Buy-before-you-sell platforms have their own criteria. Private money lenders are generally more flexible on credit, sometimes working with scores in the 600s when there is sufficient equity in the property.

Q: How much equity do I need to qualify?

A: Most programs require meaningful equity in your departing home. Combined loan-to-value limits typically range from 65% to 80% depending on the program. The more equity you have, the more options you have — and the lower the relative cost.

Q: Is a bridge loan the same as a HELOC or home equity loan?

A: No. A HELOC or home equity loan is a longer-term product typically used for renovations or debt consolidation, and may not be available once a home is listed for sale. A bridge loan is specifically designed as short-term financing to transition between properties and is paid off at the sale of the departing home.

Q: What happens if my home doesn’t sell during the bridge period?

A: Options vary by program. Some programs, like Knock and Orchard, provide a guaranteed backup offer if the home doesn’t sell within the window — though that offer is typically below market value. Private money lenders may allow extensions for an additional fee. Understanding the exit options before you commit is an important part of evaluating any bridge product.

What Advocacy Looks Like in Practice on Bridge Loans

Bridge financing involves more moving parts than most transactions — a departing property, a new purchase, a short-term loan, and often a tight timeline. Matching the right program to the right client situation, modeling the full cost picture honestly, and coordinating across all three transactions requires more than familiarity with the products. It requires knowing which options actually work for a given scenario and which ones will create problems downstream.

Below are examples of situations where the right bridge approach made the difference.

Below are examples of situations where experienced advocacy made the difference.

How One Family Beat the Competition

[Loan Strategy]
Their 3.25% mortgagA growing family had outgrown their townhouse but their equity was tied up in their current home. Contingent offers cost them multiple homes in bidding wars. When standard bridge options didn’t fit their equity position — and preserving their VA loan benefits ruled out other structures — an exception with a boutique lender opened a path forward. They bought first, moved once, had time to properly prepare their old home for sale, and went from 1,926 square feet to 3,850.e looked like a win—until rising debt and college expenses left them gasping for air. A smart refinance didn’t just lower their monthly burden—it put them on track to be debt-free a decade sooner.

A Second Home by the Sea

[Expert Advocacy]
Fleeing a war zone overseas, a contractor for theIn a coastal market dominated by cash buyers, a family was repeatedly edged out on a second home they’d been working toward for years. Without the ability to write a cash offer or overpay, the strategy shifted — running the property through automated underwriting confirmed accurate pricing, which gave them the confidence to remove the appraisal contingency. The offer became cleaner and more certain without being higher. They won. U.S. military had one goal in mind — to bring his family to safety and build a stable future. But when it came time to purchase a home in America, the journey was filled with obstacles, and that goal began to seem out of reach.

For more stories – see Case Studies ➜

Other Loan Options

A bridge loan solves the timing problem between buying and selling — but it’s worth knowing the full range of tools available for clients in a transition. Depending on your equity position, timeline, and down payment situation, one of the following may be relevant alongside or instead of bridge financing.

HELOC

A home equity line of credit lets you draw against your current home’s equity before selling — similar in concept to a bridge, but structured as a revolving line rather than a lump-sum loan. HELOCs typically carry lower costs than bridge loans, but most lenders will not allow a HELOC on a home that is already listed for sale. If you have time before you list, a HELOC opened in advance may provide more flexibility at lower cost.

Down Payment Assistance

If your equity is limited or you need to preserve cash at closing, down payment assistance programs can provide grant or soft second funds toward your purchase — reducing what you need to bring from the sale of your departing home. Some DPA programs can be layered with bridge structures depending on the loan type and program guidelines.

Conventional Loans — Low Down

If the goal is simply to buy before the departing home closes without needing a large down payment, conventional financing allows as little as 3% down on a primary residence. Combined with proper DTI documentation — or a bridge structure that removes the departing home payment from the calculation — this can be the most straightforward path for borrowers with strong credit and income.

Bridge financing isn’t something to sort through on your own — the programs are structured differently enough that the wrong choice can cost more than the bridge itself. If you’re in a buy-sell transition or anticipating one, the right starting point is a conversation about your specific situation.

If you’d like to evaluate whether conventional or another option is most appropriate, request a Home Financing Snapshot ➜