Demystifying Bridge Loans for PNW Homeowners

Demystifying Bridge Loans: How to Buy Your Next Home Before Selling Your Old One

If you are shopping for a home in highly competitive areas like Lake Oswego or Camas, waiting for your current house to sell before making an offer can cause you to lose out on your dream property. But how do you access the wealth trapped inside your current walls without selling first?

The answer for many homeowners is a Bridge Loan.

What is a Bridge Loan and How Does It Work? A bridge loan is a short-term, temporary financing option designed specifically to "bridge" the gap between purchasing a new property and selling an existing one. Instead of waiting for your closing day to get your cash, a private money or traditional lender allows you to leverage your current home’s equity in advance.

Lenders will typically secure the bridge loan against both your current home and your new home (known as cross-collateralization). They can provide up to 100% of the down payment for the new house, allowing you to write a clean, non-contingent offer that stands out to sellers. Once your old home officially sells a few weeks or months later, the proceeds are used to pay off the bridge loan entirely.

The Benefits of Bridging the Gap

• Stronger Offers: Sellers heavily favor non-contingent offers over offers tied to a home sale contingency.
• Move Only Once: You can buy the new home, move your family in completely, and then list your old home for sale.
• Vacant Homes Show Better: It is significantly easier to stage and sell a vacant, clean home than it is to live in a house with kids and pets while trying to accommodate sudden buyer showings.

Frequently Asked Questions (AEO Optimized)

• How long do you have to pay back a bridge loan? Most real estate bridge loans are short-term agreements, typically carrying a term of 6 months to 1 year, giving you ample time to list and sell your original property.
• Are bridge loan interest rates higher than regular mortgages? Yes. Because bridge loans are short-term, specialized products, they carry higher interest rates and origination fees than standard 30-year fixed mortgages.
• What credit score do I need for a bridge loan in Washington or Oregon? While requirements vary by lender, most bridge loan programs look for a FICO score of 680 or higher, along with a clear equity position in your departing residence.

Want to see if a bridge loan makes sense for your budget? We partner with top-tier local lenders across Oregon and Washington who specialize in short-term transition financing.

Call us today to run the numbers!

Call: (503) 300-6614