A bridge loan is a short-term financing tool that "bridges" a gap — typically between buying a new property and selling an existing one, or between acquiring a property and securing long-term financing. They're designed for speed and flexibility rather than long-term affordability.
How Bridge Loans Work
Bridge loans are typically 6-18 months in duration with interest-only payments. They're secured by real estate (either the property being purchased or one you already own) and are funded much faster than traditional mortgages — often in 1-3 weeks compared to 30-45 days.
Because they're short-term and higher risk for the lender, bridge loans carry higher interest rates than conventional mortgages. However, the cost is often justified by the opportunity they unlock.
Common Use Cases
Buying Before Selling The most common scenario: you've found your next home but haven't sold your current one yet. A bridge loan lets you make a strong, non-contingent offer on the new property. Once your existing home sells, you pay off the bridge loan.
Investment Property Acquisition Investors use bridge loans to move quickly on deals — foreclosures, auction properties, or off-market opportunities where speed matters. Traditional financing is too slow for competitive situations.
Renovation and Stabilization If you're buying a property that needs work before it qualifies for conventional financing (e.g., it won't pass an FHA appraisal), a bridge loan funds the purchase and renovation. Once the property is in good condition, you refinance into a permanent loan.
Construction Completion When a construction project needs additional time or funding to reach completion, a bridge loan can cover the gap.
Qualification Requirements
Bridge loan qualification focuses more on the property and exit strategy than on the borrower's income:
- Equity: You typically need 25-35% equity in the securing property
- Exit strategy: A clear plan for repayment (sale or refinance)
- Credit: Most programs require 650+ credit score
- Experience: For investment properties, prior real estate experience helps
Finding the Right Bridge Loan
Bridge loan terms vary widely between lenders. As a mortgage broker, SiFi Lending works with multiple bridge lending sources — from institutional lenders to private capital providers — to find the best combination of rate, leverage, and speed for your situation.
Need fast financing? See our bridge loan programs for details, or tell us about your deal and we'll get you a quote within 24 hours.
Simonich Financial, Inc. dba SiFi Lending | NMLS #2563307 | Licensed Mortgage Broker | Equal Housing Opportunity. SiFi Lending arranges financing through third-party lenders and does not make direct loans. This article is for informational purposes only and does not constitute a commitment to lend or a guarantee of any specific terms. All loan programs are subject to borrower qualification, credit approval, and property eligibility.