Bridge Loans

What Is a Bridge Loan?

A bridge loan is a short-term financing strategy that lets you access the equity in your current home to fund the purchase of a new one. Instead of selling first and scrambling for temporary housing, you buy your next home now and sell the old one on your own schedule.

For most homeowners, buying before selling creates two big challenges. First, qualifying for a new mortgage while still carrying your existing monthly payment. Second, coming up with a down payment when most of your wealth is tied up in your current property. Bridge financing solves both.

JVM Lending offers three approaches to bridge financing, and our team will help you determine which one best fits your situation.

Option 1: EasyPath + HELOC (Our Recommendation)

For most buyers, we recommend combining our EasyPath Mortgage Program with a Home Equity Line of Credit (HELOC) on your current property. This approach typically costs the least and gives you the most time and flexibility.
Key point: If you can come up with funds from retirement savings, other savings, or a gift from family for your down payment, you may only need EasyPath and can skip the HELOC entirely. You can read more about EasyPath on its own here.

How It Works

Step 1: EasyPath Removes Your Existing Payment from Qualification

EasyPath partners with an outside investor who signs a fully ratified, non-contingent contract to purchase your current home within 180 days. With that contract in place, underwriters remove your existing mortgage payment from your debt-to-income (DTI) ratio, so you qualify for more home.

Step 2: HELOC Provides Your Down Payment Funds

A HELOC lets you borrow against the equity in your current home to cover all or part of your down payment on the new one. Once your old home sells, you pay off the HELOC balance from the proceeds.

Fees and Costs

– EasyPath fee: $2,500 flat fee (or $3,500 if the home is over $1.3M)

– HELOC origination fee: Approximately 1.99% of the amount you borrow

– HELOC interest rate: Approximately 7% (you only pay interest on what you draw)

– Monthly payments: Yes. You will have monthly interest payments on the HELOC, plus your new mortgage payment. NOTE: these carrying costs can be paid from the HELOC proceeds if you don’t use the full amount as a down payment.

Important: You only pay fees on what you actually borrow, not on the full value of your home.

Why We Recommend This Combo

Lowest total cost for most buyers. You get a full 180 days (6 months) to sell your current home, which reduces the pressure to accept a lowball offer. If your home sells within the 180-day window, you keep 100% of the sale proceeds. If the investor purchases it after that, you keep 90% of the net profits. Conventional, jumbo, and VA loans are all eligible.

Option 2: EasyPath + Bridge Loan

This option pairs EasyPath with a traditional bridge loan instead of a HELOC. The key advantage: no monthly payments are due on the bridge funds. Everything settles when your current home sells.

Best for: Buyers who plan to pay everything off after the sale and want to avoid carrying costs, particularly those on a fixed income. Bridge Loans can also be tied to both the current home AND the new home you are buying, allowing you to borrow more than just a HELOC.

How It Works

Like Option 1, EasyPath removes your existing mortgage payment from qualification. Instead of a HELOC, which is just limited to the equity in your current home, you can take a bridge loan against your equity in the current home and/or the value of the new home giving you access to more funds.

The bridge loan then funds your down payment or even the full purchase of the new home.

No monthly payments are required on the bridge loan; the balance, fees, and accrued interest all settle from the proceeds when your current home sells.

Fees and Costs

– EasyPath fee: $2,500 flat fee (or $3,500 if the home is over $1.3M)

– Bridge loan fee: 2.5% of the bridge loan amount (not the home price)

– Bridge loan interest rate: 9.99%

– Monthly payments: None. Interest accrues and is paid from sale proceeds.

Important: You only pay fees on what you actually borrow, not on the full value of your home.

Why We Recommend This Combo

Lowest total cost for most buyers. You get a full 180 days (6 months) to sell your current home, which reduces the pressure to accept a lowball offer. If your home sells within the 180-day window, you keep 100% of the sale proceeds. If the investor purchases it after that, you keep 90% of the net profits. Conventional, jumbo, and VA loans are all eligible.

Option 3: 0% Bridge Loan

We don’t typically recommend this option because the fee is based on the sale price of your home, not on how much you actually need to borrow. However, many buyers ask about it because of the “0% interest” marketing, so we want to give you the full picture so you can make an informed decision.

How It Works

An outside investor provides the bridge loan funds. The investor calculates your available bridge amount by taking 75% of your current home’s expected sale price and subtracting any existing liens. You receive a pre-qualification letter that includes the bridge funds as part of your down payment.

Fees and Costs

– Service fee: 2.4% of the sale price of your home (regardless of how much you borrow)

– Interest rate: 0% for the first 120 days, then 9.99% for holding costs after that

– Monthly payments: None during the 120-day window.

Why the “0%” Can Be Misleading

The “0% bridge loan” sounds attractive, but the 2.4% service fee is charged against your home’s full sale price, not the amount you borrow. On a $1,000,000 home, that fee is $24,000 whether you borrow $250,000 or $100,000. With Options 1 and 2, your fees scale with the amount you actually need to borrow, which typically saves you thousands.

Side-by-Side: All Three Options Compared

Here is a side-by-side comparison using the same scenario for each option:

The Scenario

– Current home expected sale price: $1,000,000

– Existing mortgage balance: $300,000

– Available equity (75% LTV): $250,000

– New home purchase price: $1,250,000

– Time to sell old home: 4 months

Why the fee basis matters: If you only needed to borrow $100,000 instead of $250,000, Option 1 would cost approximately $6,823, Option 2 approximately $8,330, but Option 3 would still cost $24,000. The less you need to borrow, the more Options 1 and 2 save you compared to the 0% bridge loan.

When Each Option Makes Sense

Choose Option 1 (EasyPath + HELOC) if you:

• Want the lowest total cost.
• Are comfortable making monthly HELOC interest payments (or can cover them from HELOC proceeds).
• Want the full 180-day window to sell.
• Have equity but need down payment funds and are fine managing monthly cash flow during the transition.

Choose Option 2 (EasyPath + Bridge Loan) if you:

• Want to avoid monthly payments entirely.
• Are on a fixed income or prefer not to carry additional monthly obligations.
• Plan to pay everything off from the sale proceeds.
• Still want the 180-day window from EasyPath.

Choose Option 3 (0% Bridge Loan) if you:

• Need the simplest single-product solution.
• Are confident your home will sell within 120 days.
• Prefer the ease of one financing product rather than coordinating EasyPath and a HELOC or bridge loan.
• Understand that the 2.4% fee is based on the sale price and are comfortable with that tradeoff.

Pros and Cons of Bridge Financing

Pros

Buy Before You Sell

Skip the hassle of selling first, moving into temporary housing, and then buying. Bridge financing lets you move directly into your new home and sell your current one at your own pace.

Write Stronger Offers

With bridge financing in place, your offer is not contingent on selling your current home. In competitive markets, sellers are far more likely to accept a non-contingent offer over one that depends on another sale closing first.

Fast Closing Timeline

With any of the three approaches, you can take advantage of JVM Lending’s fast 14-day close guarantee, making your offer even more attractive to sellers.

Avoid Moving Twice

Without bridge financing, the typical sequence looks like this: sell your home, move to a rental, buy a new home, move again. That’s two moves, two rounds of packing and unpacking, and potentially months of uncertainty. Bridge financing cuts that down to one move.

Cons

Costs

Bridge financing is not free. With the EasyPath + HELOC approach, you’re looking at a $2,500 fee plus HELOC origination and interest. With the EasyPath + Bridge Loan, total costs run higher due to the 2.5% bridge fee and 9.99% interest. The 0% bridge loan’s 2.4% service fee can run into the tens of thousands, depending on your home’s value.

Carrying Costs (Options 1 and 2)

Until your current home sells, you may carry multiple payments. With Option 1, you have monthly HELOC interest plus your new mortgage. With Option 2, there are no monthly bridge payments, but you still carry your new mortgage. Most buyers sell within three to four months, so this is typically short-term.

Requires Equity

All three approaches require meaningful equity in your current home. You typically need at least 25% equity. The bridge loan investor will discount your expected sale price by 25%, so you’ll realistically need around 30%+ in equity to generate usable bridge funds.

Other Options to Consider

Sell First with a Seller Rent-Back

If you sell your home first, you can often negotiate a rent-back agreement with the buyer, giving you time to stay in the home while you shop for your next one. With owner-occupied financing, buyers can offer up to 59 days. If the buyer is using an investment loan or paying cash, the rent-back period can be much longer. This is often the lowest-cost option, though it does put a hard deadline on your home search.

Departing Rental Income

If you can’t qualify for both mortgage payments, renting out your current home before closing on the new one can help offset the cost. A signed lease agreement and security deposit are all you need before closing.

Frequently Asked Questions About Bridge Loans

What is a bridge loan?

A bridge loan is a short-term financing option that lets you use the equity in your current home to buy a new one before your existing property sells. It covers the gap between purchasing your next home and receiving the proceeds from the sale of your current one, so you can move on your own timeline without scrambling for temporary housing.

How does bridge financing work with JVM Lending?

JVM Lending offers three bridge financing approaches. The most popular option pairs our EasyPath Mortgage Program with a Home Equity Line of Credit (HELOC). EasyPath removes your existing mortgage payment from qualification by partnering with an investor who signs a contract to purchase your home within 180 days, while the HELOC provides funds for your down payment. We also offer an EasyPath + Bridge Loan option (no monthly payments on the bridge portion) and a standalone 0% Bridge Loan for buyers who want a single-product solution.

How much equity do I need to qualify for a bridge loan?

You typically need at least 25% equity in your current home. Keep in mind that bridge loan investors discount your expected sale price by about 25%, so having closer to 30% or more in equity will give you more usable bridge funds to work with.

How long do I have to sell my current home?

With JVM Lending’s EasyPath-based options (Options 1 and 2), you get up to 180 days (six months) to sell your current home. The standalone 0% Bridge Loan gives you 120 days at 0% interest before holding costs begin to accrue.

What does bridge financing cost?

Costs vary by option. The EasyPath + HELOC approach includes a $2,500 EasyPath fee (or $3,500 for homes over $1.3M) plus approximately 1.99% of the HELOC amount and around 7% interest on what you borrow. The EasyPath + Bridge Loan option charges the same EasyPath fee plus 2.5% of the bridge loan amount at 9.99% interest, with no monthly payments. The 0% Bridge Loan charges a 2.4% service fee based on your home’s full sale price, regardless of how much you borrow.

Do I have to make monthly payments on a bridge loan?

It depends on which option you choose. With the EasyPath + HELOC option, yes, you will make monthly interest payments on the HELOC. With the EasyPath + Bridge Loan option, no monthly payments are required on the bridge portion. Interest accrues and is settled from the sale proceeds when your current home sells. The 0% Bridge Loan also requires no monthly payments during the initial 120-day window.

What is the difference between a bridge loan and a HELOC?

A HELOC (Home Equity Line of Credit) is a revolving credit line secured by your current home. You draw what you need, pay monthly interest, and repay the balance when the home sells. A bridge loan is a lump-sum, short-term loan that can be secured by your current home, your new home, or both. Bridge loans typically have higher interest rates but may not require monthly payments. JVM Lending offers both as part of our bridge financing options.

Can I make a non-contingent offer with bridge financing?

Yes. Bridge financing removes the need to make your purchase contingent on selling your current home. This is one of the biggest advantages in a competitive market. Sellers strongly prefer non-contingent offers because they reduce the risk of the deal falling through.

What types of loans are eligible for bridge financing?

Conventional, jumbo, and VA loans are all eligible for bridge financing through JVM Lending. This applies to the EasyPath + HELOC and EasyPath + Bridge Loan options. Bridge financing is available for primary residences only.

What happens if my home does not sell within the 180-day window?

If your home has not sold within 180 days under the EasyPath program, the investor who signed the purchase contract will buy it. In that scenario, you keep 90% of the net profits from the sale. If your home sells before the 180-day deadline, you keep 100% of the proceeds.

Is Bridge Financing Right for You?

Every situation is different, and the right approach depends on your equity position, timeline, and how much you want to spend on the transition. Our team walks buyers through these options every day. We’ll run the numbers for your specific situation, compare your costs across all three options, and help you decide which path makes the most sense. Contact us today to get started.