Bridge Loans: Fast Financing to Buy Before You Sell or Refinance Later

Bridge Loans offer a fast, flexible way to buy or refinance a property without waiting on your next sale or long-term loan approval. These short-term loans “bridge” the financial gap between transactions—helping investors, builders, and homeowners move quickly when timing matters most. Whether you’re purchasing a new investment before selling another, refinancing a property listed for sale, or securing funds to prepare for permanent financing, a Bridge Loan delivers the speed and leverage needed to stay competitive in today’s fast-paced market.

What Is a Bridge Loan?

A Bridge Loan is a short-term loan designed to cover immediate financing needs until permanent or long-term funding becomes available. It’s most often used by investors or homeowners who want to buy a new property before selling their current one or who need to act quickly on a time-sensitive deal.

How Bridge Loans Work

Bridge Loans provide quick access to capital for property purchases, refinances, or cash-outs. Because these loans are short-term, they’re structured to move fast—often closing in days rather than weeks. Borrowers can use the funds to complete a purchase, stabilize a property, or improve it before refinancing into a longer-term program such as a DSCR Loan or Conventional Loan.

• Eligible Properties: 1–4 unit investment properties
• Purpose: Acquisition, refinance, or cash-out
• Loan Term: Typically 12 months
• Interest Rate Range: Around 10% and up
• Prepayment Penalty: None
• Leverage: Up to 75% of value
• Credit: Minimum 600 FICO, flexible documentation

Common Uses for Bridge Loans

Bridge Loans are commonly used when timing, speed, or flexibility matter most. They’re popular with investors and homeowners who can’t afford to wait for traditional financing or who want to unlock equity from an existing property.

• Buying an investment property before selling another
• Refinancing or cashing out of a property listed for sale
• Purchasing at auction or in competitive markets
• Covering short-term rental or fix-and-flip projects before permanent financing

Recourse & Guarantees

Many Bridge Loans are non-recourse for smaller or lower-leverage projects, meaning the borrower’s liability is limited to the collateral property. However, larger loans—especially those above $1.5 million or with less than 15% down—may require a personal guarantee for additional security.

Funding Speed

Because Bridge Loans rely on asset-based underwriting, they can close far faster than traditional loans. Documentation is streamlined, and approval is often based on property value and exit strategy rather than borrower tax returns. This makes them ideal for buyers facing tight deadlines or opportunities that can’t wait.

Exit Strategy: How You Pay Off a Bridge Loan

Every Bridge Loan must have a clear plan for repayment, known as the exit strategy. Most borrowers pay off the balance by:

• Selling their existing property
• Refinancing into a DSCR Loan, Conventional Loan, or other long-term program once eligible

Bridge Loan vs. Fix & Flip Loan

While both Bridge and Fix & Flip Loans are short-term, Bridge Loans focus more on acquisition speed and equity access rather than construction funding. Fix & Flip loans, on the other hand, include structured draw schedules for rehab or renovation costs.

Why Borrowers Choose Bridge Loans

• Fast closings for time-sensitive purchases
• Flexible qualification with asset-based underwriting
• Option to include land or existing property equity
• No prepayment penalties—refinance anytime

What This Means for You

Bridge Loans are a smart option when you need speed, flexibility, and simplicity. Whether you’re upgrading your investment portfolio or seizing a rare buying opportunity, the JD.Mortgage team at Paramount Residential Mortgage Group, Inc. (PRMG) can guide you through fast closings and seamless transitions into long-term financing.

Contact the JD.Mortgage team

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