Bridge Loans
A bridge loan is a short-term loan used to "bridge the gap" between buying a new property and selling your current one. It provides homeowners and real estate investors with quick cash by leveraging the equity in their existing property.
Bridge loans are typically secured for a period of six months to a year and often come with higher interest rates than traditional mortgages due to their short-term nature and increased risk. They can be a useful solution for buyers who need to act quickly on a new property but haven’t yet sold their current home. However, it’s important to have a clear plan for repayment, as the loan usually must be paid off once the existing property sells or refinances.
Bridge Loan Characteristics
1) A bridge loan is a short-term loan designed to provide immediate cash flow while you transition from one property to another
2) It allows homeowners or investors to leverage the equity in their current home to fund the purchase of a new property
3) Bridge loans typically have higher interest rates than traditional mortgages due to their short-term and higher-risk nature
4) The loan term is usually very short, often ranging from six months to one year
5) Repayment is generally expected once the existing property is sold or refinanced
6) Bridge loans can help buyers act quickly in competitive real estate markets without waiting for their current home to sell
7) Lenders may require significant equity in the current home and proof of the ability to repay the loan
8) While they provide flexibility and speed, bridge loans carry more risk and cost compared to conventional financing options
5) VA loans do not require mortgage insurance, which can save borrowers money on their monthly payments
6) VA loans have flexible credit requirements, which can help borrowers with less-than-perfect credit still qualify for a mortgage
7) VA loans can be used to purchase a variety of property types, including single-family homes, multi-unit properties, and condominiums
8) VA loans allow for options for refinancing, including streamline refinancing and cash-out refinancing, which can help borrowers lower their monthly mortgage payments or access equity in their home.
Disclaimer: Johnnie Fleming, NMLS #1177346 – NEXA Mortgage ("LD," "We," "Us," "Our") is exempt from mortgage and NMLS licensing for the states we lend in. Our loan products require a business purpose, and the property must be used as a non-owner-occupied investment property, also known as a rental property. Our rates, loan terms, and loan conditions are only offered to qualified borrowers, and may vary based on loan product, credit score, real estate investment experience, deal structure, property state, and several other applicable considerations. Our rates, loan terms, and quotes, are subject to change daily, at any time, with or without notice. Loans requiring less documentation may result in a higher interest rate and higher annual percentage rate ("APR").
© Copyright 2025. Johnnie Fleming, NMLS #1177346 – NEXA Mortgage. All rights reserved.