Tony found his dream home for $450,000, but there’s a problem—he doesn’t have cash for the

5% down payment ($22,500) or the $15,000 closing costs.

However, Tony owns a home worth $350,000, and he only owes $200,000 on it. That means he has $150,000 in equity —but he can’t access it until he sells his home.

How a Bridge Loan Helped Tony:

1️⃣He takes out a bridge loan for $40,000 using his current home’s equity. This covers his $22,500 down payment and $15,000 closing costs, plus some cushion.

2️⃣He buys the new home without waiting to sell his old one. His new mortgage is $427,500 (95% of $450,000).
3️⃣After he sells his current home , he uses part of the proceeds to pay off the $40,000 bridge loan.

Now, Tony owns his new home, didn’t have to wait for his old home to sell, and didn’t need cash upfront to make it happen!

✅A bridge loan can be a great solution for buyers who need cash for a down payment before selling their current home!