Short-term financing
Bridge Loan
Short-term financing that lets you access the equity in your current home before it sells, to help fund your next purchase.
A bridge loan is short-term financing secured by your current home. It lets you use your equity for the down payment on your next home before your current one sells. When your home sells, the bridge loan is paid off from the proceeds. For many move-up buyers in Colorado’s competitive markets, it’s the difference between winning the next house and losing it to a buyer without a sale contingency.
Who a bridge loan is a good fit for
- Homeowners who have found their next home before selling
- Buyers who want to make a non-contingent offer
- Homeowners with solid equity in their current home
- Buyers relocating on a short timeline
How it works
- The bridge loan is secured by your current home, based on its value and what you still owe.
- The funds go toward the down payment and closing costs on your new home.
- You buy and move into the new home.
- You sell your previous home, and the bridge loan is paid off at that closing.
Bridge loans usually run for several months to a year. Many have interest-only payments, or let payments be paid from the proceeds when you sell.
Things to weigh
- Two homes for a while. You may carry your current mortgage, the bridge loan and your new mortgage until you sell. We’ll make sure the numbers work for you.
- Costs. Bridge loans usually cost more than a standard mortgage, since they’re short-term.
- Your sale timeline. If your home takes longer to sell than expected, it’s important to know your options before you start.
If you’d rather not take that timing risk, our Buy Before You Sell program offers a backup plan if your home doesn’t sell in the expected window.
Common questions
How much can I borrow?
It depends on your home’s value, what you owe, and your finances. We’ll run the numbers with you.
Do I need to qualify for both payments?
Often, yes, though some programs treat the bridge loan differently. We’ll explain how your lender looks at it.
Bridge loan or HELOC?
A HELOC on your current home can sometimes do the same job at a lower cost, but it needs to be in place before you list. We’ll compare both.
Found your next home first? Call us at 303-931-3239, or get prequalified online.