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20 thoughts on “bridge-loan-calculator

  1. your “Both Payments Total” calculation on the Bridge Loan calculator is subtracting rather than adding the payments.

  2. Oh, that’s embarrassing. Thanks for taking the time to report it.

    Currently this site is in beta testing but with any luck, it will be updated this weekend and be live (with this fixed) sometime on Monday, 2/22.

  3. Do you need to add property taxes of both houses to this payment amount?

    • I hope I understand your question, because I don’t want to mislead you. If you own two properties you are responsible for the taxes on both properties. However, this calculator is about one property with 2 mortgages – the primary mortgage loan and the bridge loan. I would only add the property taxes for the one property that acts as the collateral for these two loans.

      Does that answer your question?

  4. Can you finance the cost of the new purchase in the bridge loan if there is enough equity.

    • I want to answer the question, but I don’t really understand it. Can you give me an example?

      Normally, this is the use for a bridge loan.

      Say you have a property that is going to sell for $300,000, and there is $150,000 mortgage balance on it.

      You want to buy a property that costs $500,000

      Your cash on hand is 20,000, but the mortgage company for the new home requires a 20% or $100,000 down payment.

      You can buy the 2nd house with a new mortgage even though you don’t have the full $100,000 cash for the downpayment. Mortgage companies will provide a bridge loan for the $80,000 needed, because you’ll clear $150,000 when the first home goes to closing.

      Of course these numbers do not take into account commissions, fees and other likely costs. The point is, the bridge loan uses the first property as collateral to provide cash to make the required down payment for the second. The bridge loan is paid back when the first property is sold.

  5. We have a mortgage loan that is in a home modification loan process. It isn’t on our credit report, but the credit report is saying we have a mortgage. The mortgage company has been evaluating this home modification loan for several months always telling us that they are working on it. In the mean time they don’t even show the mortgage on our bank statement. They will not except payments while its in this “process”. We found a seller that will except a lease to own until we can repair our credit from this mess we are in now. I am anticipating a foreclosure on our residence now. And if not the bank putting it in foreclosure, we plan to. With this many months with out making a payment they will have a ridiculous payment they will expect us to pay a month. I’d rather concentrate on repairing my credit then have this stress all the time. The new home seller wants a 10,000 down payment to do this lease to own. Do you think a bridge loan would be the best? where would we go to otherwise with our current situation?

    • Sorry, but I’m not in a position to give financial advise. My role is to help users find the right calculator or to help with modeling a particular financial problem.

      A bridge loan is used to provide cash that may be needed for making the down payment on a new purchase when there is an asset being sold that has not closed yet. Normally, if the asset is sold first, that raises the needed cash for the down payment on the new purchase.

  6. I am trying to buy a home for 326,000.00. I have an existing mortgage of 185,000. I am looking a bridge loaned because I do not have any down payment money for the new home I want to purchase. If I did a bridge loan, and purchased the second home, would I have to be paying monthly for three loans?
    1. First mortgage
    2. Bridge Loan,
    3. New second home purchase
    I am confused about how this works???????


    • Hi, thanks for your question. It’s a good one. I’ve should have documented this better.

      The short answer is “yes”, you would have 3 mortgages. But, you and then lender are free to negotiate. It’s possible that the balloon loan will just accrue the interest and everything that is due is collected at the closing of property that is the collateral for the balloon.

      To keep the math simple, let’s assume the new home costs $100,000 (wouldn’t it be nice!). Assume you have nothing to put down, but you want to eventually put down 20% and have a normal mortgage of $80,000. Assume further that your current residence is worth $75,000 and the mortgage balance is $25,000. This means you have $50,000 equity in your current home – more than enough to cover the down payment ($20,000) you plan to give for the mortgage on the new property.

      You find a lender to lend you the $20,000 for the down payment (this is the bridge loan), and they provide it at the closing of the home (probably will be the same lender that lends you the money for the nd mortgage). You now have 3 debts, the original mortgage, the 2nd mortgage on the new property and the smallish bridge loan for $20,000. When the current home is sold and goes to closing the issuer of the bridge loan has a lean on that property as collateral and will be demanding that bridge loan is paid in full with the proceeds of the sale.

      Does this help?

  7. We plan on selling our home and clear approx. 200,000.
    Our new place will take about 110,000
    With this much equity, will I still need to satisfy employment requirments, since I am retired?
    Are these loans difficult to obtain?

    • It doesn’t sound as if you even need a bridge loan since I assume you’ll pay off the 2nd mortgage for $110,000 after you sell the 1st property. Since you have so much equity in your current home, I think you can probably get a home equity line of credit for $110,000 or so using the first home as collateral and when that is open, write a check to buy the 2nd home.

  8. I purchased a home for 350, 000 cash no mortgage and im remodeling it I have spent 150,000 of my own money and need @ 250,000 to finish the remodel. my current home is worth 700,00 and I owe 240,00 on it now how would a bridge loan benefit me and what would my payments be with my current mortgage at 240k and the loan of 250k

    • the house im remodeling will be my primary residence and im listing my current home within the next couple weeks

      • I don’t think a bridge loan is what you need. I think that’s probably the wrong financial product, though offerings from lenders differ. Normally, I think of a bridge loan as a loan using the equity in one property to cover the cash downpayment requirements to take out a new mortgage on a second property. But you already own the second property.

        Rather, I think what you should look into, is a homeowners equity line of credit. You have approximately $460,000 equity in your current home. You need, by your estimates another $250,000 to finish the renovations. You could apply for a $300,000 equity line of credit to cover the renovations. The advantage is, with a HELC, the lender normally issues checks that you can use to draw down on the credit line. Until you use it, you aren’t accuring interest and you only use the amount of credit you actually need. With a bridge loan, I think the lender will advance all the funds at one time. And if you need “only” 240,00, you’ll still pay interest on $250,000.

        But I’m not a lender and as I say, products vary. I would appreciate hearing what route you actually take and if my thinking is correct.

  9. I am selling my primary residence in Indiana, and want to purchase a home in Mass, primary residence has 50,000 in equity, and owe 180,000. The new property is 550,000 and I have no idea if this loan makes any sense for me. Homes near my primary are selling between 15-45 days. Any suggestions or recommendations, we also have roughly 50,000 in a savings account if absolutely needed. Thank you,

    • You didn’t mention how much the loan is for, but if you want to tap the equity in your existing home to use toward your down payment for the new home, then a bridge loan is one way to do it.

      • Oops, sorry. My PR original loan was 200,000, after 5 years we’ve paid it down to 180,000 and comps are around 250-270 range, and new property is 525,000, not sure how this loan works in terms of down payment. We also have if needed 75,000, but prefer not use unless necessary. I am not at all familiar with this loan product, and worry about potential “catches”.

        I really appreciate your help,


        • If the new property is $525,000 and you want to put down 20%, then you need to have $105,000 cash (if I’m doing the math in my head correctly). Your cash-on-hand of $75,000 then comes up a bit short. How do you get the rest of the down payment? Some mortgage lenders will let you use the equity in your existing home, (in your case, using the low end to be conservative, that’s $70,00) as collateral for a second loan. This second loan is commonly called a bridge loan.

          I’m not here to give financial advice, but rather to explain how the calculators work. So, please consider this to be just an example. I’m not suggesting this as something you should necessarily do.

          What you could do, if you are going to close on the new property before selling the current property is see if the new mortgage lender will issue you a bridge loan (it could be complicated due to properties being in different states and the lender might not be licensed to do business in both states). Say you want to keep $25,000 cash available. You would then use $50,000 of your cash and get a bridge loan for $55,000 to have the down payment of $105,000 when you go to close on the new home.

          When you sell the current home, the bridge loan issuer will be there with their hand out, demanding payment on the bridge loan because the collateral has been sold.

          Again, I don’t mean to be giving advice, but I don’t think you have to be concerned with gotchas. You will have fees, and you should have a lawyer.

          You can also talk with a local lender and ask them about a traditional home equity line of credit on the current property. Then when you need the down payment cash, you can write a check for the HELC account.

          Hope this helps. More importantly, hope the calculator(s) here help.

          • Karl,

            Yes, it has all been a great help. I was hoping to get by with 5 or 10% down, but if thats not an option then I will simply wait to sell my home, and then look into purchasing the next property when we have the money in hand.

            Thank you for all of your help!


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