How does a Bridge loan work

Buying Florida · May 8, 2025 · 3m

A bridge loan is a short-term loan used to "bridge the gap" between buying a new home and selling your current one. It's typically used by homebuyers who need funds for a down payment on a new home before their existing home sells.

Here's how it works:

You own a current home and want to buy a new one.

You haven't sold your current home yet, so your cash is tied up in its equity.

A bridge loan gives you access to that equity—before the sale closes—so you can make a down payment or cover closing costs on the new home.

The bridge loan is secured by your current home, and repayment typically…