Transition seamlessly from your current home to your next without waiting for your existing property to sell. A Bridge Loan from Fairway provides short-term financing that allows you to tap into your current home’s equity to cover the down payment and upfront costs on a new home purchase, giving you maximum flexibility in competitive real estate markets.
A bridge loan is a short-term financing solution designed to “bridge” the gap between purchasing a new primary residence and selling your current home. When timing doesn’t align perfectly or when you want to buy your dream home before putting your existing home on the market a bridge loan allows you to access the equity tied up in your current property immediately.
Instead of requiring a contingent offer (making your new home purchase dependent on the sale of your current home), a bridge loan provides the liquid cash needed for a strong, non-contingent purchase offer and down payment. Once your previous home sells, the proceeds pay off the bridge loan balance.
Your Fairway mortgage advisor can coordinate a bridge financing strategy alongside your new permanent mortgage to ensure a smooth, stress-free transition between homes.
Bridge financing offers strategic advantages for homeowners looking to upgrade or relocate. Key highlights include:
How does a bridge loan work alongside a permanent mortgage?
A bridge loan acts as temporary short-term financing secured by your current home to cover upfront costs on your new home. Simultaneously, you secure a standard long-term primary mortgage (such as a Conventional or VA loan) for the remaining purchase balance on your new property. Once your original home sells, the proceeds settle the bridge loan balance entirely.
How much equity do I need to qualify for a bridge loan?
Qualification depends on the combined loan-to-value (CLTV) ratio of your current property. Typically, lenders require you to retain at least 20% to 30% equity in your existing home after accounting for your primary mortgage balance and the requested bridge loan amount.
What happens if my home doesn’t sell right away?
Bridge loans carry a pre-determined term (usually 6 to 12 months). Because the loan must be paid off upon maturity, working with a real estate professional to price and market your current property effectively is an essential part of the bridge financing process.
Can I use a bridge loan for property renovations before selling?
Yes! Depending on program guidelines, equity accessed through a bridge loan can sometimes be used to perform value-adding updates or staging on your current home, helping maximize its eventual market sale price.
Fairway is an equal housing lender. Financial qualifications, minimum equity thresholds, credit score requirements, maximum loan-to-value limits, and property eligibility apply for all bridge loan products. Fairway is not affiliated with any government agencies.
