Bridge Loan in Orlando: How to Unlock Home Equity to Buy Before You Sell
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Cheyenne Wiseman Associate EditorClose
Cheyenne Wiseman Associate EditorCheyenne Wiseman is an Associate Editor at HomeLight.com. Previously, she worked as a writer for Static Media (Mashed.com and Chowhound.com) and as an editor for CBR.com. Cheyenne holds a bachelor’s degree in English from UC Davis, where she also founded and led a literary magazine called Open Ceilings. She has four years of experience writing and editing on topics including real estate, financial advising, and pharmaceuticals.
Selling your current home while trying to buy a new one in Orlando can feel like a logistical nightmare. You need the equity from your existing property to fund the next purchase, but pulling that off without disruption to your daily life isn’t easy.
With homes taking longer to sell, aligning the timing of your sale and next purchase becomes even more challenging. It might feel like your only option is to sell, move into a temporary rental, and house hunt under pressure.
A bridge loan could be the tool you need to help everything fall into place — giving you the flexibility to buy your next home without rushing to sell your current one first. In this guide, we’ll break down everything you need to know about getting a bridge loan in Orlando.
Yes, You Can Buy Before You Sell. Why Move Twice?
Through our Buy Before You Sell program, HomeLight can help you unlock a portion of your equity upfront to put toward your next home. You can then make a strong offer on your next home with no home sale contingency.
What is a bridge loan, in simple words?
A bridge loan is a short-term loan that helps you buy a new home before your current one sells. It’s often used by homeowners who need access to their equity to make a down payment or cover closing costs on a new place — without having to wait for the sale of their old home.
This type of financing is usually more expensive than a traditional mortgage but can offer valuable flexibility when timing is tight.
Bridge loans are also sometimes called:
- bridge financing
- bridging loan
- interim financing
- gap financing
- swing loans
How does a bridge loan work in Orlando?
A common situation where you might use a bridge loan in Orlando is when you’ve found your next home, but your current one hasn’t sold yet. Rather than miss out on your new purchase, you can tap into your existing home’s equity to cover the down payment and closing costs for your next property.
In many cases, the same lender providing your new mortgage can offer a bridge loan as part of the financing package. They typically require that your current home is already listed for sale and typically limit the bridge loan term to six months or one year.
Your debt-to-income ratio (DTI) also comes into play. Lenders may need to factor in your existing mortgage, your new mortgage, and the bridge loan’s interest payments.
However, if your current home is under contract and the buyer’s loan has final approval, your lender might only count the new mortgage in your DTI calculation. This helps lenders assess whether you’ll be able to manage both sets of payments if your home doesn’t sell right away.
What are the benefits of a bridge loan in Orlando?
Here are a few ways a bridge loan in Orlando can help make your move smoother:
- You can make a non-contingent offer: Sellers typically prefer buyers without home sale contingencies.
- You only have to move once: Save yourself the trouble and extra money associated with temporary housing or storage.
- You can prepare your old home for sale: Move out first, then focus on preparing your home with staging and repairs.
- Some lenders don’t require payments during the loan period: You may not owe anything until your previous home sells.
- You can act fast on a new home: Make an offer without worrying about selling first.
What are the drawbacks of a bridge loan?
While a bridge loan can give you flexibility and alleviate some stress when it comes to selling your current home and purchasing a new one, there are some drawbacks:
- Additional loan costs (underwriting fee, origination fees, etc.)
- Added financial stress of paying two mortgages and a bridge loan at once
- Qualifying may be more difficult than a traditional mortgage loan
- Underwriting can be slower than expected
When is a bridge loan a good solution?
A bridge loan isn’t a blanket solution for all real estate transactions, but for some sellers, it can ease the stress of transitioning between an old home and a new one.
Some examples of when a bridge loan might be a fitting solution include:
- You need the equity from your current home for a new home’s down payment.
- You want to avoid a double move or temporary housing.
- You’ve found your next home and need to act fast to secure it.
- Your offer’s home sale contingency has held you back from competing with other buyers.
- You’re unable to prepare or sell a staged home while still living in it, and want to move out first.
What’s required to get a bridge loan in Orlando?
To qualify for a bridge loan in Orlando, you typically need the following:
- Qualifying income: Your lender will assess whether you can afford payments on your current mortgage, new mortgage, and the bridge loan.
- Sufficient equity: Most lenders require at least 20% equity in your current home; some may ask for as much as 50%.
- Good credit history: A credit score above 650 is the standard requirement. Higher scores may help secure better rates and terms.
- Your current home to be listed for sale: Some lenders require proof that your home is on the market or under contract.
How much does a bridge loan cost in Orlando?
Below is an example of the cost of a $300,000 bridge loan in Orlando, along with possible fees.
You find a home you’d like to purchase, but you’re still waiting for your current Orlando house to sell. The new home’s asking price is $500,000. You can only come up with $200,000, but you have at least another $300,000 worth of equity in your current property. You want to access that money to cover the shortfall before you lose your new home to another buyer.
| Net loan amount | $300,000 | $300,000 |
| Interest (varies) | 10% (example for 6 months) | $15,000 |
| Origination fee | 1.5% | $4,500 |
| Underwriting fee | $1,000 | $1,000 |
| Appraisal fee | $700 | $700 |
| Closing cost* | 2.3% | $6,900 |
| Total repayable amount | $328,100 |
*These closing costs typically range between 1.5%-3%
What's Your Current Home Worth?
As you make plans to buy a new home, get a value estimate on your current house from HomeLight for free. Our tool analyzes records of recently sold homes near you, your home’s last sale price, and other market trends to provide a preliminary range of value in under two minutes.
Who provides bridge loans in Orlando?
Due to the underwriting demands for this type of loan, you may find that fewer institutions in Orlando offer bridge loan products. Curious borrowers may inquire with different types of lenders before submitting an application. The most common sources include:
- Your mortgage lender
- Local banks
- Credit union
- Hard-money lenders
- Non-qualified mortgage (non-QM) lenders
Are there alternatives to bridge loans in Orlando?
While a bridge loan might not work for every Orlando homeowner’s situation, there are a few alternatives to consider:
- Home equity loan: This kind of loan (sometimes called a HEL) lets you borrow money using the equity in your home as collateral. Interest rates for a home equity loan can be more expensive than your current rate on your first mortgage. However, instead of completing a cash-out refinance (paying off the first mortgage and borrowing cash), you can just borrow the money you need at the higher interest rate and leave your first mortgage at its lower rate.
- Home equity line of credit (HELOC): A HELOC is another option for using your existing equity. This lets you pull money out of your property for a relatively low interest rate. Instead of receiving the money all at once, your lender will extend a line of credit for you to borrow against. Keep in mind that you may have to pay an early closure fee if you open this line of credit and close it very soon after. Unlike a home equity loan, HELOCs typically have adjustable interest rates.
- Cash-out refinance: This type of loan lets you pull cash out of your home while refinancing your previous mortgage at the same time. Interest rates are usually higher for these kinds of loans compared to regular refinancing options but are lower than those for bridge loans. This path isn’t for everyone, though. For example, you can’t do two owner-occupied loans within one year of one another. You might have to wait longer to finance your new purchase with an owner-occupied mortgage using the cash from your cash-out refinance.
- 80-10-10 (piggyback) loan: With this option, you take out a first mortgage and a second mortgage at the same time (hence why it’s called a piggyback loan), allowing you to put just 10% down. For buyers who don’t have enough available cash for a large down payment, this strategy can help avoid the cost of mortgage insurance. Keep in mind, though, you’ll be responsible for three mortgage payments until you sell your current home and can pay off the second mortgage.
- A 401k loan: Borrowing against your retirement account has its benefits and drawbacks — your repayment period will be relatively short (up to 5 years), and your monthly payment will likely be high. This could affect your ability to qualify for your new mortgage, as your lender will need to include this monthly payment when calculating your debt-to-income ratio. If your 401k plan allows, you might be able to borrow up to $50,000 to put toward your new purchase.
Are there modern ways to buy a house before I sell?
Thanks to advancements in real estate technology, companies like HomeLight now offer streamlined solutions that integrate bridge loans into user-friendly programs, making it easier to buy and sell a home at the same time in Orlando. These “Buy Before You Sell” programs can offer a more complete financial bridge, helping you transition into your next home with less stress and uncertainty.
In partnership with your Orlando real estate agent, HomeLight can help you move into your new home quickly and confidently, while working to get the best possible offer for your current home. Ask your agent if HomeLight Buy Before You Sell is available in your area.
Other companies offering “Buy Before You Sell” or home trade-in services include Knock, Orchard, Flyhomes, and Homeward.
How does HomeLight Buy Before You Sell work?
Here’s how HomeLight’s Buy Before You Sell program works for Orlando home sellers:
- Apply in minutes with no commitment: Discover if your property is a good fit for the program and get your equity unlock amount approved in 24 hours or less. No cost or commitment required.
- Buy your next home with confidence: Once approved, you can access a portion of your equity in your current home. You’ll be able to submit a competitive offer with no home sale contingency at any time — regardless of how long it takes to find your dream home. Our near-instant Equity Unlock Calculator lets you estimate how much equity we can unlock from your current home.
- Sell your old home with peace of mind: After you move into your new home, we’ll list your unoccupied home on the market to attract the strongest offer possible. Once it sells, you’ll receive the remainder of your equity.
Benefits of Homelight Buy Before You Sell
- Timeline flexibility: Forget about perfectly syncing your sale and purchase dates. This program gives you breathing space to plan your transition without feeling hurried.
- Financial peace of mind: You can avoid the stress of potential double mortgages or dipping into savings to bridge the gap between homes.
- Enhanced buying power: In a seller’s market, a non-contingent offer can stand out, increasing your chances of securing your dream home.
- Sell for up to 10% more: After you move, you can list your old home vacant and potentially staged, leading to a higher selling price (according to HomeLight transaction data).
For Orlando homeowners facing the challenges of buying and selling at the same time, HomeLight’s Buy Before You Sell program offers a convenient, stress-reducing solution. You can explore more details about the program at this link.
HomeLight also provides additional tools and services for Orlando buyers and sellers, including Agent Match to connect you with top-performing real estate agents in your area, and Simple Sale, which lets you receive a no-obligation, all-cash offer to sell your home in as little as 7 days.
As you plan your sale, you can also use HomeLight’s free Net Proceeds Calculator to estimate your potential earnings.
A creative financing solution for Orlando homeowners
As Orlando homeowners work through the challenge of buying and selling at the same time, many are turning to bridge loans as a way to ease the transition.
A bridge loan allows you to tap into the equity in your current home to help fund your next one — giving you more flexibility and helping you avoid a rushed sale or double move.
While this short-term financing option can be a great fit for some, it’s not right for everyone.
HomeLight’s Buy Before You Sell program offers a modern alternative designed to reduce stress and give you more control. We can also connect you with a top-performing Orlando agent who understands how bridge loans work and can guide you through your next move.
Editor’s note: As a friendly reminder, this post is intended for educational purposes, not financial advice. If you need assistance navigating the use of a bridge loan in Orlando, HomeLight encourages you to reach out to your own advisor.
Header Image Source: (Mick Haupt/Unsplash)
At HomeLight, our vision is a world where every real estate transaction is simple, certain, and satisfying. Therefore, we promote strict editorial integrity in each of our posts.