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Many homeowners who want to transition into a new home assume that they need to sell in order to buy – something that has a myriad of potential complications and requires massive coordination and some good luck.  That’s why Freedom Mortgage developed the Bridge Loan Program - the perfect solution to avoid the hassle of selling before buying!  
Learn more about Bridge Loans* from Freedom Mortgage
What is a Bridge Loan? 
Bridge Loans are a suite of mortgage products uniquely designed to facilitate homeowners and investors who want to purchase a new property prior to selling their current one.
When is it beneficial?
  • When you need funds for an escrow deposit or down payment on a new property
  • When you want to know where your next long-term home will be before you sell your current property 
  • When you don’t want to liquidate investments or retirement funds due to personal and tax implications
  • When you need time and funds to complete renovations on a new home before moving out of your current one
  • When you want to become a cash buyer to strengthen your offer in a competitive market 
  • When real estate investors want to access equity in their holdings to fund their next project
What are the most common types?
The best financing solution for your needs will depend on several factors including your financial profile, how quickly you need the funds and the amount of equity in your current residence.  Here are the most common types of bridge loans we can arrange for you:

Traditional Bridge Loan: Cashing out equity from your current residence to use for a down payment on a new property.

Cross-Collateralization: Securing one loan against both the departing residence and your new home to access the equity in your current property in lieu of a down payment.

Increased Financing on New Residence: Taking a larger mortgage on the new property which you would pay down once you close on the sale of your prior residence.  This is similar to a bridge loan, but uses the property you’re purchasing as the collateral for the loan rather than your current residence being the collateral.

Home Equity Line of Credit (HELOC): Using a new (or existing) HELOC to borrow the funds for the down payment on the new property.
What costs and impositions can you avoid? 
There are costs associated with taking out a Bridge Loan, but there are also monetary costs and impositions associated with selling your home before you have a new property to move into that help offset the cost of the bridge financing.  Some of those costs and impositions are:
  • Double moving costs by having to move twice (into temporary housing and then into your new home)
  • Expensive temporary housing & storage fees
  • Uncertainty and stress of not knowing where you’ll be living before you sell your current residence
  • Potential tax consequences when liquidating investments (Consult your tax advisor)
  • Children and pets being displaced
  • Missing deadlines for school registration
  • Not being able to easily time your move relative to various life events (wedding, vacation, etc.)
  • Many more
How long does it take to close?
The amount of time it takes to close a bridge loan varies depending on several factors such as how quickly you provide paperwork requested by our team and how quickly related third parties (appraisers, building management companies, etc.) respond to our requests.  Also, if the property you’re securing your Bridge Loan against is a coop, you will need to obtain coop board approval for your financing and that can significantly lengthen the time it takes to close.
What are the typical closing costs?
Bridge Loans have closing costs similar to other mortgage transactions including loan underwriting/processing fees, title insurance, mortgage recording tax (NY State), appraisal fees and other costs.  Depending on the structure of the loan, you may also be required to pay from one to three “points” as well.  One of our main goals is to find the most cost-effective solution for your Bridge Loan scenario, so please inquire online and we will provide you with a closing cost estimate specific to your transaction.
What rates can I expect?
Bridge Loans are all unique to each applicant, as are the rates that will be applicable to each situation.  In some cases, rates may be the same as prevailing rates on conventional loans and in some cases they could be higher depending on several factors.   We recommend you inquire online so we can get you a rate quote specific to your Bridge Loan scenario.
What property types can be used as collateral?
We can secure financing against just about any type of property including 1-4 family homes, coops (with board approval), condos and others.  Commercial and mixed-use properties are also eligible with our cross-collateralization product.  In general, properties must be in habitable/functional condition at the time of appraisal inspection and free of open permits and non-mortgage liens (some exceptions may be possible on a case-by-case basis).
Can a coop apartment be used as collateral?
Whenever you get financing secured by a coop, you need to get formal board approval for the financing before you can close and a Bridge Loan is no different.  Some coop boards are fine with shorter-term financing secured by the shares while others may not be.  Before you apply for bridge financing, we recommend you check with your managing agent or coop board to determine if Bridge Loans are allowed and how long they may take to review and approve your application so you can plan accordingly. You should expect Bridge Loans secured by coop apartments to take longer than 30 days to close because of the time needed to get the board approval in place.  
What are the keys to a successful transaction?
Inquire Early:  If you wait until your property is listed for sale or until you have an accepted offer on a new property to contact us, you may significantly limit the financing options we have to offer you.  In some cases that can also increase the cost associated with the Bridge Loan, so it’s best that you call us before you’re too far into a purchase or sale transaction so we have as many financing options as possible for you to choose from.
Move Fast:  Once you decide to proceed with an application, it’s imperative that you provide requested paperwork and signatures on standard loan disclosures quickly since most Bridge Loans are time sensitive by nature.  The longer you take to complete tasks during the approval process, the longer the loan will take to close and the more stressful it may become due to time pressures from the other parties associated with the purchase and sale transactions.
Be Definitive:  We want you to fully understand all of the costs and benefits of a Bridge Loan before you decide to proceed with an application so that you can make definitive decisions on the best strategy that you want to follow.  Wavering during the process can cause delays with your closing, so we ask that you gain as much knowledge as possible upfront so you feel confident in pushing forward with the decisions you make at the onset of the transaction.  That’s not to say that you can’t make changes along the way, but making those changes mid-stream could cause delays.
How can I get started on a Bridge Loan Inquiry?
Simply visit the Inquire section of our website and answer the questions we need to know in order to guide you to the best solution for your Bridge Loan.  After submitting the information, one of our Loan Officers will contact you within 1-2 business days in order to discuss your potential options so you can decide on the most cost-effective approach to suit your needs.
Still have questions about Bridge Loans?   
Choose a topic below to download one of our flyers for more information
*Some Bridge Loan products are brokered through a third party.  Other Bridge Loan products may be available through our Retail channel.   Our Home Equity Line of Credit Program is brokered through a third party and is not available in Alabama, Alaska, Hawaii, Louisiana, Mississippi, Oklahoma, Texas, West Virginia
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