Jeni VanOrnum | Real Estate Insights & Education

Need to buy before selling? I’m Jeni VanOrnum, your Douglas County real estate agent, explaining how bridge loans help move-up buyers in 2025.

What Is a Bridge Loan?

A bridge loan provides short-term financing (typically 6-12 months) allowing you to buy your next Douglas County home before selling your current one. You borrow against your current home’s equity for the new down payment, then repay when your home sells.

How Bridge Loans Work

You qualify for your new mortgage based on income and credit, secure a bridge loan using your current home as collateral (you’ll have a first mortgage and bridge loan on your current property), use bridge loan funds for down payment on your new home, move into your new home while marketing your old one for sale, and repay the bridge loan when your old home sells.

Bridge Loan Costs

Bridge loans typically have higher interest rates than traditional mortgages (often 2-3% higher), origination fees of 1-2% of loan amount, monthly interest payments during the bridge period, and potential prepayment penalties. Despite costs, they solve the timing problem for move-up buyers.

Who Qualifies for Bridge Loans?

Lenders typically require significant equity in your current home (usually 20%+ after the bridge loan), strong credit scores (typically 680+), low debt-to-income ratio (ability to qualify for both mortgages temporarily), and proof you’re actively marketing your current home for sale.

Bridge Loan vs. Home Equity Line

Some buyers use home equity lines of credit (HELOCs) instead of bridge loans. HELOCs offer lower interest rates and more flexibility but require qualifying for three credit products simultaneously (current mortgage, HELOC, new mortgage), which can be challenging.

Alternatives to Bridge Loans

Consider selling first with temporary housing, contingent offers on your next home, rent-back agreements with your buyer, or family loans for down payment (repaid after sale). Each option has advantages and disadvantages.

When Bridge Loans Make Sense

Bridge loans work best when you need to move quickly for job relocation, you’re in a competitive market where contingent offers won’t work, you have significant equity and strong finances, and your current home should sell relatively quickly.

Douglas County Market Considerations

In 2025’s balanced Douglas County market, homes are selling in 35-50 days on average. This predictability makes bridge loan timing less risky than in slower markets where homes might sit unsold for months.

Professional Guidance Required

Bridge loans are complex financial products. Work with experienced mortgage professionals and your real estate agent to determine if this strategy fits your situation.

Explore Your Options

Ready to discuss bridge loans and other move-up buyer financing strategies? Contact Jeni VanOrnum today for lender referrals and expert guidance.