A bridge loan for home purchase is short-term financing that lets you buy your next home before your current one sells. In a competitive Glen Allen market, that can decide whether your offer wins. It is also one of the more expensive ways to solve a timing problem, and many buyers who ask about it end up with a cheaper option.
I’m Duane Buziak, and I walk Glen Allen, Short Pump, and Innsbrook families through this decision regularly. Below you’ll find how bridge loans are built, a full Henrico County dollar example with a nine-month stress test, the alternatives to compare first, and a checklist for deciding.
- The timing problem a bridge loan solves
- How a bridge loan is structured
- What a bridge loan costs: a worked example
- Alternatives to compare first
- Qualifying: credit, equity, and documents
- Deciding if a bridge loan fits your move
- Bridge loan questions answered
- Where to start your planning
The Glen Allen Timing Problem a Bridge Loan Solves
Suppose you live in Twin Hickory or Wyndham and want to move up. A house near Short Pump Town Center or Crump Park hits the market on Thursday, and your own home is not even listed. You could submit an offer contingent on selling yours, but sellers tend to read that as the weakest offer in the stack. A clean offer from a buyer who does not need to sell first wins more often, especially when several buyers are competing.
That gap is what a bridge loan fills. A bridge loan, also called a swing loan or gap financing, is short-term money usually secured by your current home. It funds the down payment on the new house and is repaid when the old one sells. Terms commonly run about 6 to 12 months, though that varies by program, and I confirm current ranges against investor guidelines before quoting anyone. If you want the broader strategy for buying before selling, that guide covers it in more depth.
By Duane Buziak, NMLS #1110647, mortgage broker at Glen Allen Mortgage by Duane Buziak, operating through Coast2Coast Mortgage LLC (NMLS #376205).
One misconception deserves correcting early. A bridge loan is not a standard mortgage product that every broker can offer. As of this writing, availability depends on the program, and much of it comes from portfolio or private capital rather than the conventional channels most purchase loans use. It also does not replace your purchase mortgage. You still need a regular mortgage on the new home, and the bridge only supplies the cash to get there.
How a Bridge Loan Is Structured: Three Common Setups
Bridge financing is not one product, and the structure changes both the cost and the risk. Three setups come up most often.
Setup 1: standalone second lien
This is the most common. You take a short-term loan against your current home’s equity, while the existing mortgage stays in place. You use the proceeds for the new down payment and closing costs, and the bridge is repaid from sale proceeds.
Setup 2: all-in-one
Here the bridge pays off your old mortgage and also funds the new down payment, leaving a single short-term loan on the old home. It is less common because the bridge then sits in first position at a short-term rate, which usually costs more than keeping a low existing mortgage in place. Few borrowers with a good rate on the old loan want to give it up.
Setup 3: payment timing
Payment treatment varies by program. Some bridge loans are interest-only with a balloon payoff at sale or maturity. Others defer payments, letting interest accrue and collecting it all at payoff. A balloon payment simply means the full balance comes due at once, so know your maturity date and whether an extension option exists.
Equity limits and the purchase mortgage
Programs generally cap the combined loan-to-value (CLTV) on the old home, often around 80%, though I verify the figure for each program. An appraisal sets the home’s value, and a payoff estimate on your first mortgage sets what remains. The difference, after the cap, is the most you can borrow.
Your new purchase mortgage still has to qualify, and underwriters generally count the payments on both homes in your debt-to-income ratio (DTI). The exception is when the old home is under contract to sell. Under conventional guidelines, the departing residence’s payment can sometimes be excluded if documentation is in place, and the rules are in the Fannie Mae Selling Guide section on monthly debt obligations. I review that language against your exact scenario before anyone plans around it.
What a Bridge Loan Really Costs: A Worked Henrico County Example
The numbers below are an illustration, not a quote. Every rate and fee is an assumption, and real costs vary by program. For current mortgage rate context, check the Freddie Mac Primary Mortgage Market Survey, which publishes weekly averages. Bridge pricing typically sits above those standard rates. For a look at how rates have been trending, see these facts about current home loan interest rates.
The scenario. Your Glen Allen home is worth $550,000 and carries a $250,000 mortgage. You want a $650,000 home and plan to put 20% down, which is $130,000.
- Available equity: 80% of $550,000 is $440,000. Subtract the $250,000 mortgage and you could access up to $190,000, so a $130,000 bridge fits.
- Origination fee (assumed 1.5%): $1,950.
- Interest (assumed 10%, interest-only): $130,000 x 0.10 / 12 = about $1,083 per month, or $6,500 over six months.
- Appraisal, title, and other fees (assumed): $1,500.
Six months of bridge costs total about $9,950.
The carrying cost. Assume the old home’s payment (principal, interest, taxes, insurance) is $1,900 a month, plus $400 for utilities and upkeep while it sits listed. Over six months that is $13,800. Add the bridge costs and the premium for the overlap is roughly $23,750 compared with a clean sell-then-buy move. You also carry a new payment on a $520,000 mortgage from closing onward, which you would have after any move.
What if it takes nine months? Interest grows to $9,750, and suppose an extension fee of 0.5% ($650) applies. Bridge costs reach $13,850. Carrying costs rise to $20,700. The total premium is about $34,550, nearly $11,000 more than the six-month case, from three extra months.
That compounding is the main risk. Costs vary by program, so treat these figures as a stress test for your own budget rather than a prediction.
Bridge Loan Alternatives to Compare First
Many sellers do not need a bridge loan. Compare these first.
HELOC on the current home. Often cheaper than a bridge, but timing matters. Many HELOC providers will not open one on a home that is already listed for sale, so it has to be arranged before you list. If you are even thinking about a move next year, ask early. Understanding the difference between a home equity loan and a HELOC will help you pick the right structure.
Cash-out refinance before listing. You refinance your current home, pull equity as cash, and use it for the next down payment. Duane Buziak’s cash-out refinances go up to 90% loan-to-value on eligible programs, and I confirm that by loan type before anyone relies on it. The trade-off is replacing your existing rate and paying refinance costs.
Negotiating with the seller. A sale contingency, a rent-back after closing, or an extended closing date can sometimes bridge the gap at little cost. In a fast market that leverage is weaker, because sellers have other offers to choose from. For more on this approach, read about whether you can buy before selling your home in Glen Allen.
Other routes. Some programs let you buy before you sell, and a 401(k) loan can supply cash, but a 401(k) loan reduces retirement savings and may come due if you leave your job. I verify any program’s rules before recommending it.
| Option | Speed | Typical cost drivers | Risk | Best for |
|---|---|---|---|---|
| Bridge loan | Moderate, depends on appraisal and program | Origination fee, higher interest, appraisal, title, extension fees | Costs compound if the old home sits; balloon payoff | Strong equity, competitive offer needed, adequate reserves |
| HELOC | Moderate, but must be opened before listing | Variable interest on the amount drawn, modest setup fees | Variable rate; may be unavailable once listed | Planners who can act before listing |
| Cash-out refinance | Slower, full loan process | Refinance closing costs, a new rate on the whole balance | Gives up your existing rate | Owners with strong equity and time |
| Sale contingency | Fastest, no new financing | Usually none directly | Weaker offer, may lose the house | Slower markets, motivated sellers |
| Sell first and rent | Depends on your sale | Rent, a second move, storage | Two moves; possible rent-up in a tight rental market | Low-stress sequencing, thin equity |
Qualifying: Credit, Equity, and Documentation
Underwriters look at four things: the equity in your current home, your credit profile, your cash reserves, and your combined debt-to-income ratio with both housing payments counted. Strong equity helps, but equity alone does not guarantee approval. Reserves matter because the program wants proof you can carry two homes if the sale drags. If your credit needs work first, this guide on how to improve your credit score before buying a home is a good starting point.
FHA and VA purchase loans have their own rules about holding two mortgages. VA buyers should ask specifically whether and how entitlement can be reused when the old home has not yet sold, and the VA home loans page is where those rules are published. For FHA, check HUD’s guidance, since FHA generally limits borrowers to one FHA-insured mortgage with defined exceptions. I check both before you commit to a plan. Veterans can also review the VA loan benefits for veterans to see how entitlement works.
Loan size matters too. FHFA announced a 2026 baseline conforming loan limit of $832,750 for one-unit homes, and Henrico County is not a high-cost area, so that baseline applies. Confirm the figure on the FHFA conforming loan limit page before relying on it. A $520,000 mortgage like the one in the example above sits well under it.
The credit-safe first step is Duane Buziak’s NoTouch Credit Pull. It works as a soft credit pull mortgage review, showing your options with no credit hit. From there, a mortgage pre approval without hard pull lets you plan the sequence before any formal application.
Documents worth gathering now:
- Your current mortgage statement
- An estimated payoff figure
- The listing agreement, or the sale contract if one is signed
- Proof of reserves, such as recent bank and retirement statements
Deciding If a Bridge Loan Fits Your Move
Run through these steps in order. If you stall on one, the bridge probably is not the right tool yet.
- Check your equity. As a rule of thumb, you want roughly 20 to 30% equity or more in the current home after the bridge. This is a guideline, not a guarantee.
- Test your reserves. Could you carry both payments, plus bridge interest, for at least six to nine months without strain?
- Get a realistic price. Ask a Realtor for an honest list price and expected time on market, not the optimistic version.
- Write a backup plan. Decide in advance what happens at month nine: a price cut, a rental, or a payoff from savings.
Red flags include thin equity, a house that may be hard to sell, and a bridge with a large balloon and no extension option.
Days on market should drive your assumptions. I did not quote a figure here because it moves month to month. Pull the current Henrico County or Glen Allen median from the Redfin Data Center, note the month you checked, and size your reserves to it. Time on market in a neighborhood like Innsbrook can look different from Short Pump.
As a broker, I work with Realtors who refer clients to me and compare options across hundreds of investors through one search platform, so a bridge is weighed against the alternatives rather than offered by default. If you want a first look without a no credit hit surprise, a soft pull mortgage broker conversation costs you nothing in score. You can also get pre-qualified for a home loan to see where you stand before making any move.
Bridge Loan Questions Answered
What is a bridge loan for home purchase?
It is short-term financing, usually secured by your current home, that funds your next home’s down payment before the old one sells. It is repaid from sale proceeds, typically within about 6 to 12 months, depending on the program.
Does a bridge loan replace my mortgage?
No. You still need a regular purchase mortgage on the new home. The bridge supplies cash for the down payment and closing costs.
How much equity do I need for a bridge loan in Glen Allen?
Programs often cap combined loan-to-value around 80% on the old home, so you generally need meaningful equity. Exact limits vary by program, and I verify them case by case.
Can I get a mortgage pre-approval in Glen Allen without a hard credit pull?
Yes, for planning purposes. Duane Buziak’s NoTouch Credit Pull gives a soft credit pull mortgage review so you can see options before any hard inquiry.
How does NoTouch Credit Pull work?
It reviews your credit with a soft pull, so your score is not affected. You see likely loan options and can plan a bridge, HELOC, or refinance before a formal application.
What does a bridge loan cost?
Costs include an origination fee, interest above standard mortgage rates, appraisal, title, and sometimes extension fees. All of it varies by program, and the illustration above shows how six versus nine months changes the total.
Is a HELOC cheaper than a bridge loan?
Often, yes, but many HELOC providers will not open one on a home already listed. Open it before you list if you can.
Does Duane Buziak offer bridge loans?
Availability depends on the program and investor, and it is not a standard product. Duane Buziak reviews your situation and compares bridge, HELOC, and cash-out refinance options before recommending any of them.
Can I count both mortgage payments when I qualify?
Underwriters generally count both unless the old home is under contract and documentation is complete. Conventional guidelines are in the Fannie Mae Selling Guide, and FHA and VA have their own rules.
What areas does GlenAllenMortgage.com serve?
GlenAllenMortgage.com serves Glen Allen and nearby Henrico communities, including Twin Hickory, Wyndham, Innsbrook, Short Pump, West Broad Village, Tuckahoe, and Lakeside.
Where to Start Your Planning
A bridge loan is a useful but costly tool, and it works best when you have compared it against a HELOC, a cash-out refinance, and a negotiated contingency first. For many Glen Allen sellers, one of those costs less. The right answer depends on your equity, your reserves, and how fast your home is likely to sell.
Call Duane Buziak at Glen Allen Mortgage by Duane Buziak at 804-212-8663, or stop by 4860 Cox Rd, Glen Allen, VA 23060, for a planning conversation with no hard pull. Ready to experience stress-free mortgage approval with no credit hit and access to hundreds of lenders at once? Get your free mortgage consultation today and discover why Glen Allen families trust Duane Buziak for personalized guidance and the fastest close times in the area.
