Bridge Loan Calculator
Calculate bridge loan payments when buying a new home before selling your current one. Compare interest-only vs. amortized payments and see your combined monthly obligations.
Current Home Details
New Home Details
Bridge Loan Terms
Typical range: 9-12%
Typical: 70-85%
Bridge Loan Analysis
Important Considerations
- Bridge loans typically require good credit (650+ score)
- You'll be carrying two mortgages plus the bridge loan
- Ensure you can afford payments if home doesn't sell quickly
- Consider contingent offers as an alternative
- Factor in stress of managing two properties
Understanding Bridge Loans
A bridge loan is short-term financing that helps you purchase a new home before selling your current one. It "bridges" the gap between buying and selling, allowing you to make non-contingent offers in competitive markets.
How Bridge Loans Work
Typical Process
- Apply for bridge loan using current home as collateral
- Use funds for down payment on new home
- Move into new home
- Sell current home
- Pay off bridge loan with sale proceeds
Common Terms
- Term: 6-12 months typical
- Interest rates: 9-12% (2024)
- LTV: Up to 80-85%
- Fees: 1.5-3% origination
- Payment: Often interest-only
Pros and Cons
Advantages
- Make non-contingent offers
- Move on your timeline
- Avoid temporary housing
- Time to prepare home for sale
- Stronger negotiating position
Disadvantages
- High interest rates
- Additional fees
- Risk if home doesn't sell
- Carrying multiple loans
- Qualification requirements
Qualification Requirements
- Credit Score: Typically 650+ minimum, 700+ preferred
- Debt-to-Income: Must qualify carrying all loans
- Equity: Usually need 20%+ equity in current home
- Exit Strategy: Clear plan to sell current home
- Reserves: 2-6 months of payments in savings
Alternatives to Bridge Loans
- Home Equity Line of Credit (HELOC): Lower rates but takes time to establish
- Contingent Offers: Make offer contingent on selling current home
- Rent-Back Agreement: Sell first, rent back while finding new home
- 401(k) Loan: Borrow from retirement (if allowed)
- Gift or Family Loan: Temporary assistance from family
When Bridge Loans Make Sense
- Hot seller's market with multiple offers
- Found dream home before selling
- Significant equity in current home
- Strong income to support payments
- Confident home will sell quickly
- Need to relocate for work