Bridge loans typically cost 10-13% APR plus 2-4% origination fees, making them expensive short-term financing.

For a $100,000 bridge loan over 6 months: Interest costs $5,000-6,500, origination fees $2,000-4,000, total cost $7,000-10,500.

Compare to HELOC (6-8% APR), home equity loan (7-9% APR), or contingent sale which costs nothing but may lose you the new home.

Bridge loans create triple mortgage exposure: current home mortgage, new home mortgage, and bridge loan payment.

Calculate total DTI including all three payments - most lenders require staying under 43-50% DTI.

Example: $2,000 current + $2,500 new + $800 bridge = $5,300/month.

Need $12,000+ monthly income to qualify.

Many borrowers use interest-only bridge loans to reduce payment burden.

Requirements include: 20-30% equity in current home, credit score 680+, DTI under 50% including all mortgages, 6-12 months reserves, clear sale plan for current home, and new home under contract.

Some lenders require listing agreement for current home.

Investment properties and second homes typically do not qualify.

Processing takes 2-3 weeks.

Most bridge loans have 6-12 month terms with possible 6-month extension at additional cost.

If home does not sell: Request extension (costs 1-2% fee plus continued interest), refinance to longer-term financing, sell at reduced price, or risk foreclosure on bridge loan.

Some lenders offer backup plans like converting to longer-term seconds.

Always have exit strategy.

Yes, consider these alternatives: Contingent offer (free but less competitive), HELOC on current home (lower rate, longer term), 401k loan (no credit check, 5-year term), asset-based lending (if substantial investments), seller financing (negotiate with seller), lease-back agreement (sell first, rent back), or timing closing dates strategically.

Each has trade-offs in cost, risk, and competitiveness.

Bridge loans make sense when: Hot seller market where contingent offers fail, significant equity in current home (30%+), high confidence home sells within 3-6 months, new home is exceptional opportunity, and cost is less than potential appreciation.

Avoid if: Current home needs major repairs, local market is slow, DTI is already stretched, or you lack 12+ months reserves.