Skip to main content

Bridge loans are used to bridge the gap between buying a new home and selling a previous home. These short-term loans are a great benefit to buyers who want to purchase their new home before selling their current home.

Typically, buyers will need to use the profits from selling their homes to purchase a new home. This can create tight time frames and cause buyers to scramble to find something and sometimes settle not to be homeless once their home sells. Bridge loans solve this issue and allow buyers to avoid private mortgage insurance (PMI) if they put 20% down on the loan. 

Because of the short time frame of these loans, they often have higher interest rates. Something else to keep in mind is that although buyers can purchase a new home, they’ll still have to make payments on two separate mortgages if they still owe money on their current home. 

Benefits of a Bridge Loan

  • No PMI with 20% down
  • Able to purchase a new home before selling a current home
  • Higher interest rates 
  • Short-term loan

If you are interested in applying for a Bridge Home Loan with The Mortgage Firm North Central Florida, make sure to view our loan checklist and contact us with any further questions!