Bridge Loan

Use Your Current Home Equity to Buy the Next Home Without Waiting to Sell

A bridge loan can help you use the equity in your current home for the down payment on your next purchase without draining your savings, investment accounts, or retirement funds.

If you want to buy before your current home sells, this program can help you make a stronger non-contingent offer and move forward with more flexibility.

Bridge Loan Highlights

• Use equity from your current home for the next down payment

• Avoid pulling from savings, investments, or retirement accounts

• Help make a stronger non-contingent offer

• 680+ minimum credit score

• Interest-only monthly payments

• 6-month balloon term

• Option to renew for an additional 6 months

• Closing costs may be rolled into the loan

What Is a Bridge Loan?

A bridge loan is short-term financing that allows you to unlock equity from your current home before it sells.

That equity can then be used toward the down payment and related costs on your next home purchase.

For many homeowners, this creates a way to move forward on the next house without needing to:

• drain cash reserves

• sell investments

• tap retirement accounts

• wait for the current home to close first

Why Buyers Use a Bridge Loan

The biggest reason buyers use a bridge loan is simple:

They found the next house before their current one sold.

A bridge loan can help you:

• buy the next home before selling the current one

• use current home equity for the new down payment

• preserve savings and liquid assets

• avoid pulling funds from retirement or brokerage accounts

• make a cleaner, more competitive offer

This can be especially helpful in competitive markets where sellers prefer buyers with fewer contingencies.

Make a Stronger Non-Contingent Offer

A bridge loan can help remove one of the biggest obstacles in a move-up purchase: waiting on your current home sale before having enough cash for the next one.

By using equity from your current home, you may be able to make a stronger non-contingent offer on the next property.

That can give you a major edge when:

• inventory is tight

• multiple offers are common

• sellers want a cleaner deal

• you want more control over timing

Bridge Loan vs Home Sale Contingency

Many buyers assume their only option is to make an offer contingent on selling their current home first. In some cases, that works. But in a competitive market, a home sale contingency can weaken your offer and reduce flexibility.

A bridge loan and a home sale contingency solve the same problem in very different ways.

Home Sale Contingency

A home sale contingency means your purchase depends on your current home selling first.

That may help protect you from carrying two homes at once, but it can also create challenges:

• Sellers may see the offer as weaker

• Competing buyers with fewer contingencies may win

• Timing becomes more difficult to control

• You may need to delay buying the next home until your current home is under contract or sold

Bridge Loan

A bridge loan allows you to use the equity in your current home before it sells.

That can help you:

• access funds for the next down payment

• avoid making the purchase contingent on your current home sale

• make a stronger, cleaner offer

• preserve cash in savings, investment, or retirement accounts

• move forward faster when the right home becomes available

Which Option Is Better?

A home sale contingency may still make sense for some buyers, especially if they want to minimize short-term risk and are not in a highly competitive market.

A bridge loan may be a better fit for buyers who:

• have enough equity in their current home

• want to buy before selling

• want stronger offer terms

• do not want to tie up liquid assets for the next down payment

• need more flexibility with timing

The best option depends on your equity position, cash available, market conditions, and overall purchase strategy.

Avoid Draining Savings, Investments, or Retirement Accounts

Many homeowners have enough equity to buy their next home, but the problem is that the equity is still locked inside the current property.

This bridge loan program is designed to help qualified borrowers use that home equity instead of:

• emptying savings accounts

• selling investment assets

• interrupting long-term retirement strategies

• creating unnecessary cash-flow pressure during a move

That can make the transition to the next home much cleaner financially.

Who This Program May Be Best For

This bridge loan may be a strong fit for homeowners who:

• have equity in their current home

• want to buy before selling

• need funds for the next down payment

• want to preserve cash and liquid assets

• want to make a stronger offer

• have a 680+ credit score

Program Highlights

Loan Amounts Up to $250,000

• Maximum loan amount: $250,000

• Origination fee: $1,500

• Term: 6-month balloon

• Payments: Interest-only monthly payments

• Renewal option: Additional 6 months for a $2,000 fee

• Maximum CLTV: 85%

• Closing costs: Can be rolled into the bridge loan and paid from loan proceeds

Loan Amounts from $250,001 to $500,000

• Maximum loan amount: $500,000

• Origination fee: $2,500

• Term: 6-month balloon

• Payments: Interest-only monthly payments

• Renewal option: Additional 6 months for a $2,000 fee

• Maximum CLTV: 75%

• Closing costs: Can be rolled into the bridge loan and paid from loan proceeds

How the Bridge Loan Works

A bridge loan is typically used when you have equity in your current home, but that equity is not available yet because the home has not sold.

This program allows you to access that equity now so you can use it toward the purchase of your next home.

Common uses include:

• down payment on the next home

• purchase-related costs

• creating stronger offer positioning

• reducing reliance on liquid assets during the move

Interest-Only Payment Structure

This bridge loan is structured with interest-only monthly payments during the loan term.

That can help keep payments lower during the short-term transition period while you work toward selling your current home and completing the move.

6-Month Term with Renewal Option

This program is structured as a 6-month balloon loan.

If additional time is needed, there is an option to renew for an additional 6 months for a $2,000 fee, subject to program terms.

This can provide extra flexibility if the current home sale takes longer than expected.

CLTV Requirements

The maximum combined loan-to-value ratio depends on the bridge loan amount:

• Up to $250,000 bridge loan: 85% maximum CLTV

• $250,001 to $500,000 bridge loan: 75% maximum CLTV

Available bridge proceeds will depend on the value of the current home, existing liens, and the overall loan structure.

Bridge Loan FAQs

What is a bridge loan?

A bridge loan is short-term financing that allows a homeowner to use equity from their current home before it sells.

What can the bridge loan funds be used for?

Bridge loan funds are commonly used toward the down payment and related costs for the purchase of the next home.

Can I use a bridge loan instead of pulling from savings or investments?

Yes. One of the main goals of this program is to help qualified borrowers use current home equity instead of draining savings, investment, or retirement accounts.

Can I make a non-contingent offer with a bridge loan?

That is one of the primary benefits. A bridge loan can help provide the funds needed to make a stronger offer without waiting on the current home sale first.

What is the minimum credit score?

This program requires a 680 or higher credit score.

What are the payments like?

The loan is structured with interest-only monthly payments during the term.

How long is the loan term?

The bridge loan has a 6-month balloon term.

Can the bridge loan be extended?

Yes. There is an option to renew for an additional 6 months for a $2,000 fee, subject to program terms.

Can closing costs be included in the loan?

Yes. Associated closing costs can be rolled into the bridge loan and paid out of loan proceeds.

Bridge Loan Program in Indiana

We help homeowners in Indiana use the equity in their current home to strengthen the purchase of their next one. If you are trying to buy before you sell and want to avoid pulling from savings, investments, or retirement accounts, we can help you compare whether a bridge loan makes sense for your situation.

Ready to Compare Your Bridge Loan Options?

If you want to use your current home equity for the next purchase, we can help you review bridge loan eligibility, available equity, CLTV, payment structure, and how the program fits into your home buying strategy.