H
ome buyers often dread the idea of owning two houses at once. A recent Clever Real Estate survey found that roughly one‑fifth of homeowners rank the risk of mistiming a sale with a new purchase as a top fear. To sidestep this, many put a sale contingency on their offer, but that can weaken their bid. Others tap personal loans, piggyback mortgages, 401(k) withdrawals, or home equity.
Home equity has surged—National Association of REALTORS® reports the average homeowner’s net worth climbed $140,900 in the past five years. This boom fuels interest in bridge loans, which let sellers draw on a portion of that equity to cover the costs of buying and selling at the same time. Austin Niemiec, Rocket Mortgage’s chief revenue officer, explains how bridge loans help today’s seller‑buyers.
**What is a bridge loan?**
A bridge loan is a short‑term bridge that lets homeowners access the equity in their current home before it sells. It provides the cash needed for a down payment or closing costs on a new property, eliminating the need to tap savings, liquidate stocks, or dip into retirement accounts. The loan enables buyers to act quickly in a competitive market without waiting for their existing home to sell.
**Why are bridge loans timely?**
Inflation has pushed prices higher, credit card debt is at record levels, and savings are shrinking. Yet homeowners hold unprecedented equity. Bridge loans tap that equity, offering a practical solution amid rising costs and tightening credit.
**How much equity can you use?**
Lenders set limits, typically allowing a percentage of the available equity to cover the new home’s down payment and closing costs. The goal is to provide enough liquidity while preventing overextension.
**What qualifies you?**
Equity is essential, but not the sole criterion. Lenders assess overall creditworthiness—income, credit score, and financial profile—just like a traditional mortgage. The loan is designed to be safe, ensuring borrowers can manage both properties during the transition.
**Rocket Mortgage Bridge Loan specifics**
Borrowers receive up to six months to sell their current home. If the sale stalls, options include refinancing the bridge loan, extending the term, or switching to a different solution. The priority is to keep borrowers supported and avoid being stuck.
**Competing with cash buyers**
Cash offers are the strongest, followed by offers without contingencies. A bridge loan removes the contingency of selling a current home, strengthening a buyer’s position against cash competitors. It also eliminates the anxiety of rushing to sell while securing a new property.
In short, bridge loans let buyers unlock home equity, secure a new purchase, and navigate the market without the burden of owning two homes simultaneously.
