What it is
A bridge loan lets you use the equity in the home you're selling to help buy the new one, before the sale closes. Once your sale closes, the bridge loan is paid off from the proceeds.
When you need it
You need it when your purchase closes before your sale. For example, your new home closes on June 1 and your current home closes on June 20. Without a bridge loan, the equity from your sale isn't available on June 1.
What lenders usually require
- A firm sale on your current home, with conditions removed. This is the big one.
- Approval for the new mortgage.
- A short gap between the two closings. Bridge loans are designed for weeks or a few months, not open-ended.
What it costs
You usually pay interest only for the days you use it, plus a setup or legal fee. Your lender will give you the exact rate and fees. For a short gap, the cost is often modest compared to the stress it saves.
If you can't get bridge financing
- Line up your closing dates on the same day, so the money moves from sale to purchase.
- Ask the buyer of your home for an earlier closing, or the seller of your next home for a later one.
- Use a short rent-back on the home you sold, so you stay put for a few days after closing.
See all the options in Can you buy before you sell in New Brunswick?
General information only. Your lender confirms bridge financing terms and costs.
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Have a question about your own move? Call or text 506-304-9292, or send me a note and I'll reply within one business day.