Bridge loans allow homeowners to buy a new home before selling their current one, eliminating the need for a sale contingency that makes offers less competitive.
How Bridge Loans Work
- Short-term loan (6-12 months) against current home equity
- Use proceeds for down payment on new home
- Repay when current home sells
- Rates: 8-12% (higher than standard mortgage)
- Fees: 1.5-3% origination
Modern alternatives include Knock, Orchard, and Homeward, which buy your next home on your behalf and let you repay when your current home sells. These services charge 1.5-3% but provide a cleaner solution than traditional bridge loans.
