Bridge Loans

Move forward before your home sells.

Short-term financing

Flexible loan amount

Support your down payment

Bridge the gap between two homes.

Finding your next home does not always happen on the same schedule as selling your current one. A bridge loan can provide short-term financing that helps you use available equity in your existing home toward the down payment on your new home.

Michigan First Mortgage can help you understand whether a bridge loan fits your homebuying timeline, available equity and financial qualifications.

Buy your next home without waiting to sell

Coordinating a home sale and purchase can be difficult. You may find the right home before receiving an offer on your current property - or need to close on the new home before the proceeds from your sale are available.

A bridge loan may help close that timing gap. It is secured by your existing home and provides funds that can be used toward the down payment on your new home. The loan is intended to be temporary and is generally repaid when your current home sells.

This can allow an eligible buyer to make a purchase without depending on both transactions closing at the same time.

How does a Bridge Loan work?

A bridge loan allows you to borrow against a portion of the available equity in your current home. Michigan First permits a maximum combined loan-to-value of 80% on that property.

The amount you may be able to borrow depends on:

The qualifying value of your current home
Your remaining mortgage balance
Other debt secured by the property
The equity available within the 80% limit
Your income, debts and overall financial qualifications
The amount needed for your new home’s down payment

Bridge loan funds are then used toward the down payment on your new home. When your current home sells, the proceeds are typically used to repay the bridge loan and any remaining mortgage balance secured by that property.

When could a Bridge Loan help?

A bridge loan may be worth exploring if:

You have found your next home before selling your current one
Your down payment funds are tied up in your current home
You need to close on the new home before your current home sells
You have sufficient equity in your existing property
You can qualify while accounting for the required housing obligations
You have a realistic plan for listing and selling your current home

A bridge loan is not necessarily the right solution simply because your closing dates do not align. The expected sale timeline, cost of borrowing and financial impact of temporarily owning two homes should all be considered.

Bridge Loan features

Michigan First bridge loans offer:

Short-term financing for eligible homebuyers
Competitive rates and low closing costs
Flexible loan amounts based on available equity
A maximum combined loan-to-value of 80% on the current home
Funds that can be used toward the down payment on the new home
Guidance from a Michigan First Mortgage Loan Officer throughout the process

All loans are subject to credit approval, property eligibility, sufficient equity and applicable underwriting requirements.

What to consider before using a bridge loan

A bridge loan can provide greater flexibility, but it also creates an additional financial obligation until your existing home sells.

Before applying, consider:

Your Expected Sale Timeline

Think realistically about how quickly your current home may sell. Market conditions, property condition, asking price and buyer financing can all affect the timeline.

Your Temporary Housing Obligations

Depending on the loan structure and timing, you may be responsible for obligations associated with your current mortgage, bridge loan and new mortgage before your former home sells.

The Cost of Short-Term Financing

Interest and closing costs apply to bridge loans. These expenses should be weighed against the benefit of purchasing your next home before completing your sale.

The Risk of a Delayed Sale

If your current home takes longer to sell than expected - or sells for less than anticipated - you will still be responsible for repaying the bridge loan according to its terms.

Your Available Equity

The amount available is limited by your property value, current mortgage balance, other liens and Michigan First’s maximum combined loan-to-value requirement.

The Bridge Loan process

Discuss Your Homebuying Timeline

Tell your Mortgage Loan Officer about the home you plan to purchase, your current property and when you expect to sell it.

Review Your Available Equity

Michigan First will evaluate your current home’s qualifying value, mortgage balance and other liens to determine how much equity may be available.

Apply for Financing

Complete the required applications and provide information about your income, assets, debts, properties and mortgage obligations.

Complete the Property and Loan Review

Your current property may require an appraisal or another form of valuation. Your bridge loan and new mortgage will proceed through the applicable underwriting and approval processes.

Close on Your New Home

Approved bridge loan funds are used toward the down payment on your new home.

Sell Your Current Home

When the property sells, the proceeds are used to pay off the existing mortgage and bridge loan secured by the home.

Make your next move with greater flexibility

You may not be able to control exactly when your current home sells, but you can prepare for the financial gap between two transactions. A Michigan First Mortgage Loan Officer can help you determine whether a bridge loan provides the flexibility you need to move forward.