Selling your current home while buying a new one can feel like a high-stakes balancing act. Timing the sale and purchase just right — especially in a competitive market like Phoenix — often adds extra pressure. When inventory is low, and prices are high, it might seem like your only option is to sell first, move out, and find a temporary place to live while you search for your next home. But there’s another way to make the pieces fit together more smoothly. A bridge loan could be the solution you’re looking for. This short-term financing option can help you buy your new home first and then sell your old one on your schedule. A bridge loan is a short-term loan that helps you buy a new home while you’re still in the process of selling your current one. It uses the equity you’ve built in your existing home to give you quick access to cash for a down payment or to cover closing costs on your next purchase. Because bridge loans are designed for speed and convenience, they usually cost more than a traditional mortgage. But for many buyers, the higher cost is worth it to avoid rushed sales or temporary housing. Bridge loans are also sometimes called: A common scenario in Phoenix where you might need a bridge loan happens when you find the perfect new home but haven’t yet sold your current one. In this case, you would use the equity from your existing home to cover the down payment and closing costs on your new purchase. The lender handling your new mortgage will often also offer a bridge loan option. They usually require that your current home be actively listed for sale and will typically extend the bridge loan for six months to one year. Your lender may need to calculate your debt-to-income ratio, which could include your old mortgage payment, your new mortgage payment, and any interest-only payments on the bridge loan. If your current home is already under contract and the buyer has final loan approval, your lender might only count your new mortgage payment. This helps make sure you’re financially covered if your old home doesn’t sell right away. There are benefits to using a bridge loan that can help make your move to Phoenix a little smoother. While a bridge loan can increase your flexibility and relieve some pressure during a buy-sell move, there are still a few drawbacks to consider. A bridge loan isn’t the right solution for every situation, but it can ease the stress of selling and buying simultaneously. Some examples of when a bridge loan might be a good solution include:What is a bridge loan, in simple words?
How does a bridge loan work in Phoenix?
What are the benefits of a bridge loan in Phoenix?
What are the drawbacks of a bridge loan?
When is a bridge loan a good solution?
