Bridge loan
A short-term loan that uses the equity in your current home to buy the next one before the first sells. It costs more than a regular mortgage and is repaid when the old home sells.
Also called: bridge financing, swing loan, gap loan
Related terms
The part of a property's value you own outright: its market value minus what you owe on loans against it. Equity grows as you pay down the loan and as the property gains value.
A contract term that makes the purchase depend on the buyer selling their current home. Sellers often accept it only with a kick-out clause.
A homeowner selling their current home to buy a bigger or pricier one. Timing both sales often means a home sale contingency, bridge loan, or rent-back.
A short-term loan from a private lender based mainly on the property's value rather than the borrower's income. It closes fast but carries high rates and fees, and is common with flips and other investment deals.
A revolving credit line secured by your home, which you can draw on and repay as needed. Rates are usually variable, and it typically sits behind the first mortgage as a second lien.