What is a Bridge Loan?

A Bridge Loan is a short-term loan that helps you purchase a new property before selling your current one. As the name suggests, it acts as a “bridge” to cover the funding gap between transactions.

 

 

Key Features

• Loan Term: Typically 6 to 12 months (up to 18 months in some cases)

• Repayment: Interest-only payments; principal due at maturity (Balloon Payment)

• LTV (Loan-to-Value): Usually up to 65%–75%

• Eligible Properties: Residential, multifamily, commercial properties

• Income Documentation: Flexible or minimal documentation required

 

 

When to Use a Bridge Loan

• You need to buy a new property before selling your existing one

• You want to act quickly on a great investment opportunity

• Your long-term financing is delayed but you need to close immediately

 

 

Benefits

• Fast approval and closing (often within 5–10 days)

• Access funds without waiting for your current property to sell

• Asset-based underwriting with a simplified process

 

 

Things to Keep in Mind

• Higher interest rates and fees compared to conventional loans

• Short repayment period requires a clear exit strategy