Home What are Bridge Loans? – Top Providers in 2020
Vidal Arias

For almost a century the idea of owning a house has been one of the key pillars of the American Dream. For many decades it’s been acting as one of the ultimate goals that everyone aspires to. But one important aspect that nobody tells you about this dream is that there is always going to be another dreamed house, life changes and economic cycles will also influence individuals into aiming for something better.

In the past, if you had a property and you decided to list on the market in order to buy something else, you would have had to wait until the first house was sold before even been able to search for your new home. Take into consideration that this might not be the case if you had the cash to buy the second one without selling first, but for most Americans, it was not the case.

The idea behind a bridge loan is to act as a lending vehicle that will help you borrow the money that you will get from selling your current property and appoint it towards buying your new house. It is a very straightforward type of loan and it typically only acts as a short term borrowing vehicle, allowing individuals to get financed for a period of time that could range between 2 weeks and 3 years.

This borrowing vehicle has become one of the backbones of the entire housing market, allowing individuals to change between properties without the hassle from the past.

It is easy to get a loan unless you need one! Norman Ralph Augustine

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BridgeLoans are short term loans utilized to buy a property while you are selling another one, effectively advancing you part of the amount that you will receive once the sell has been closed. It is important to mention that even though this is one of the most convenient and direct models to facilitate the buying of a property, it is also one of the most expensive alternatives. Borrowers should be aware of the high fees and interest rates before committing with a bridge loan. 

For this specific article we focused solely on real state bridge loans, it is important to mention that this type of borrowing vehicle is also utilized for working capital, equipment acquisitions, and even debt refinancing.


What are the Pros and Cons of Getting a Bridge Loan?

Depending on your situation a Bridge Loan could become your best savior or your worst enemy if not used appropriately. It is key to understand that many individuals get lured by the idea of buying a better house and they actually forgot about the consequences that the wrong structure might have to their finances and their life.

A bridge loan is a great structure, the problematic rises when individuals who were not qualified get their hands in this type of borrowing vehicle. Before even considering a BridgeLoan over any other type of financing, it is important for you to understand what are the pros and cons of borrowing money with this product.


What are Bridge Loans?...

  • Freedom of House Hunting:  A bridge loan will allow you to search the market with the freedom of knowing that you will be able to make an offer without selling your first property. This might be a great option for anyone who is interested in an x property but knows money won’t be available on time. Choosing a new home is not an easy task, and there is nothing worse than seeing a place that has all the features you are looking for and missing the opportunity simply because of time.
  • Short Term Lending: It is great to know that your commitment won’t be for too long, while there are other options that might cover this type of scenarios, in most cases, it would commit you for a longer period of time. Depending on your income, it is not savvy at all to be dealing with two properties at the same time, plus the cost of financing.
  • Eliminate the cost of Moving Twice: Moving out can be a complicated and traumatic experience, no only you are living memories in your old house but it is also a real headache once you take into consideration all the preparation and effort it takes. One common practice in the US has been to sell your property, then rent while you find you’re a new house. While this might save you the fees of a bridge loan, it certainly is more expensive down the road. If possible, you should totally consider avoiding the hassle of moving to a temporary place just to move again a couple of months or weeks down the road.
  • Stronger Purchase Offer: If you are selling your house one of the worst news you can get is to receive and offer that has a contingency attached to it. This means that while someone is interested in buying your property, their offer depends on their ability to sell an already existing property. For most sellers, this would be considered as a weak offer and someone offering less money than you could easily win any bid. By eliminating the contingency and putting cash in your hand, you would be able to make a hard offer on any property of your interested. It is important to mention that this benefit both the buyer and the seller as the transaction will take place in a much smoother and faster way.

What are Bridge Loans?...

  • High-Interest Rates (Fees): This might be the best choice in terms of effectiveness and how smooth the process might be, but it is certainly not cheap… at all!. Before even considering about getting a bridge loan you should understand your finances very well in order to determine if you can afford it. Since it is a short term loan, but a high risk one, most institutions will take advantage by charging obscene fees and extremely high-interest rates for the transactions.
  • Overall Debt Increases: You should keep in mind that while the first property acts as collateral while it is sold, this means that overall you are acquiring more debt. It is key for you take into consideration the fact that depending on how long it takes for your first property to be sold, you might end up paying for a mortgage and a bridge loan at the same time. This can be incredibly expensive and if not planned properly, it can put you in a very complicated and bad position both financially but also emotionally.
  • Risky Contingency: Unless you have a confirmed and committed buyer that is simply waiting for a credit deposit to expire, the transaction won’t be risk-free. Take into consideration that commitment letters can be broken in certain scenarios, and once again you don’t want to be the one holding to mortgages at the same time.

The best advice I can provide is for you to take your time analyzing your own scenario in order to determine if a bridge loan is even a good idea based on your situation. If you are dealing with a good realtor, they might be able to advise you based on their experience but it is still recommended for you to take some time with a financial advisor before making any decision.


Bridge Loans Vs other Competitive Loan Lenders

Bridge is a different loan lender in the sense that it seeks to fund the purchase of your new home if you are relying funds from selling your current property. Generally, the lenders help bridge the financial gap between owning a new home, hence its name –   “Bridge”. Let’s compare its loan limit, interest rates, credit score requirement, and repayment period to different lenders such as Tittlemax, Ace Cash, and Opploans under the same criteria

Bridge Loan

  • Loan limit of up to 80% of the value of your current home combined with the property you intend to buy
  • Requires an excellent credit score of more than 740
  • 8.5% to 10.5%of the total loan amount as interest rate 
  • 2 to 5 years repayment period


  • Borrow between $2,600 to $10,000(Varies by the State, credit profile, and value of collateral) 
  • No credit score check
  • Charges an annual interest rate of 300% on average, but can go as high as 1000%
  • Loan amount should be paid after every 28 to 31 days

Ace Cash

  • Borrowing from $100 – $2,000 (varies by state). 
  • No credit score check 
  • Fee rate on $100 starts from $25 (State dependent)
  • Loan repayment period of 1 to 3 months


  • Borrow limit $500 to $5,000
  • Bad credit score is allowed
  • Annual payment rate starts from 99% to 199%
  • Payment period of 9 to 36 months


Types of Bridge Loans?

1. Seller Financing

2. Conventional Loans

3. Blanket Loans

4. Hard Money Loans


How to Find the Best Bridge Loan Lender?

Unlike mortgages where you can get providers offering their services to the entire country, bridge loans are usually managed in a  more local way. This means that the best place to start searching for the best provider is by reaching out to a real state or mortgage broker in your area.

Most financial institutions of size will not even botter on offering retail bridge loans, the main reason for this is the fact that the entire process requires a lot of moving parts for a loan that will be canceled in a couple of months. Keep in mind that banks and financial institutions are in the business of doing money and they are interested in getting high-interest rate loans but at the longest tenure possible.

By getting a local provider you are gaining advise from a firm that knows the market where you are selling and they can also provide a full service in terms of actually helping you sell your property. At the end of the day, it will be in their best intention and benefit for your property to be sold and for their loans to be paid in full. Most companies do not want to deal with the hassle of having to execute collateral simply because it was not sold and the individual could not afford several properties at the same time.

What are Bridge Loans?...

If possible, it is recommended to stay away from hard money lenders. The main reason for this is that not only they will charge an interest rate and fees that are completely above the market, but they are known for churning their clients. Buying your new house should be a pleasant experience, our advice is to avoid complicating it for yourself and your family.

The housing and real estate market is big enough for you to be able to find the right provider. It is better to take a little bit longer and be able to get in touch with the right firm, than simply doing business with the first option that crosses your way. For most individuals their mortgage might probably the largest debt they may have, it is incredibly important to protect your capital and your heritage in this type of transactions. As mentioned above, you don’t want to jeopardize your own house or your family.


Best Bridge Loans Providers in 2019


What are Bridge Loans?...

1. Hurst Lending & Insurance | Best Residential Option

Hurst Lending & Insurance is a firm that offers a broad range of services and products, one of them being their mortgage division which specializes in residential properties in seven different states.

While it is not their core business, the firm has become known for offering bridge financing alternatives that are tailormade to each client needs. It is important to keep in mind the fact that is rarely seen a company getting so involved in this type of lending instrument, once you analyze the market you can easily see that not many firms are even getting involved in this fairly new sector.

Another important aspect worth mentioning is that this firm offers a really broad range of products that are designed with the intention of helping individuals like freelancers or simply self employeed individuals reach their goals of buying a house or a property.

Pros and Cons about Hurst Lending & Insurance


What are Bridge Loans?...

2. Gud Capital | Overall Best Bridge Loan

Gud Capital is a well-known name countrywide, while it is their brand what is usually marketed in reality the firm only acts as an intermediary between borrowers and local lenders interested in offering their services as mortgage brokers and bridge loan providers.

This is an option that provides liquidity and conveniences to a market that truly needs some help. As mentioned before the main problem that many individuals have with bridge loans is the fact that there are not many firms publicly marketing their services in terms of lending nationwide and this makes people rely on their local names.

Pros and Cons about Gud Capital


What are Bridge Loans?...

3. North Coast Financial| Best Option for Californian Real Estate

For almost four decades this firm has been the number one provider of bridge loans in the state of California, offering their services for some of the most important residential projects in the state.

This is a firm that has created a name as the best bridge loan lender in the state by offering fast funding and an easy and transparent process. The main reason why this firm has become so important is the fact that due to state regulations all types of residential loans must have to follow a due diligence process that can take up to 3 weeks. Due to the fact that the firm also offers hard money investment in this type of properties the loans can be approved almost immediately.

If you live in California o you are planning on moving there, you should take NCFS as your best option in the state.

Pros and Cons about North Coast Financial



There are literally hundreds if not thousands of scenarios where a Bridge Loan could be the best option for an individual to acquire new real state or even reconstruct an existing one. Individuals should be aware that just like with any type of borrowing vehicle, it has it’s own downside if not utilized properly or simply if the time is not right.

One of the most common uses of bridge loans is for individuals who are trying to flip their houses in order to acquire another property. You should take into consideration that depending on the economic cycle, the housing market or simply your luck, selling a property might take more than expected and you should provision based on that.

On a best-case scenario, you sell your property and you pay for your bridge loan without much hassle, but if things go south you need to know that you are being covered and that you can afford to hold multiple real estate pieces at the same time. This is a game where proper analysis and preparation could become the difference with achieving your property goals or putting yourself in a bad spot financially.

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  • Bad Credit Considered
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How much documentation is needed in order to obtain a Bridge Loan ?

How much can you actually Borrow ?

Is there any credit score limitation?

What is the Best Tenure for a Bridge Loan ?

What are the six / twelve months rule?

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Vidal Arias

Vidal Arias

Vidal is an experienced Strategist and Portfolio Manager with a keen interest and passion for the financial markets and also writing. During his career, he has developed excellent market timing skills, focusing mainly on the macro analysis of the US Equity Market and the overall US Financial Market. He started his career as a financial analyst for a major American bank and continued his way into the trading desk as a Sr. Trader and later as a Portfolio Manager for an Offshore Hedgefund in Europe. Linkedin: vidalarias Email: [email protected]