Bridge Loans in Columbus, Ohio: How to Unlock Home Equity to Buy Before You Sell

If you’re looking at bridge loans in Columbus, Ohio, you might need more certainty as you plan your move. 

Maybe you’ve outgrown your current home and want more space for your family, but you’d rather settle into your next home before preparing your current one for sale.

A bridge loan is one way to unlock equity and buy before you sell, but it’s not the only option available to Columbus homeowners. Depending on what you want to prioritize, there may be other ways to access your equity, strengthen your offer, and avoid the stress of coordinating two transactions at once.

In this article, we’ll go over how bridge loans in Columbus work, what yours might look like, and how today’s Buy Before You Sell programs can help you move with more flexibility.

Here's How You Can Buy Before You Sell in Columbus

With HomeLight Buy Before You Sell, you can make a strong, non-contingent offer on your new home without waiting to sell your current home. This modern bridge solution unlocks the equity in your existing property, streamlining the entire process so you win the home you want — and move only once.

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What is a bridge loan, in simple words?

A bridge loan is effectively what the name implies: it “bridges” the gap between buying a new house and selling your current one with a temporary loan.

You might hear people refer to bridge loans as:

• Bridge financing
• Interim financing
• Gap financing
• Swing loans
• Bridging loans

Think of it as a financial safety net, since it lets you tap into the equity of your current home to use as a down payment on your next one. This can be done before your current house has even sold. After it does sell, the proceeds are used to pay off the bridge loan entirely.

Since contingencies can delay the process of securing your dream home, a major plus is that you don’t have to make your offer contingent on selling your old home first.

Because bridge loans are meant to be a temporary solution rather than a long-term loan, lenders charge higher interest rates — similar to how convenience stores charge a bit more for products that you might need in a pinch. For many Columbus buyers, that extra cost is worth it to avoid the chaos of moving twice, renting a temporary place, or panic-selling their current home.

How does a bridge loan work in Columbus?

You might need a bridge loan when you’ve found the perfect home in another Columbus neighborhood or suburb, but you haven’t yet sold your current one. In this case, you would use the equity from your existing home to cover the down payment and closing costs on your new purchase.

Oftentimes, the lender handling your new mortgage will also offer a bridge loan. A requirement is usually that your current home is actively listed for sale, and they’ll typically extend the bridge loan for six months to one year.

Your lender may also need to calculate your debt-to-income (DTI) ratio, which could include your old mortgage payment, your new mortgage payment, and any interest-only payments on the bridge loan.

If you’ve already found a buyer and their loan is approved, your lender might ignore your old house payment for now. They’ll only look at your new payment, which ensures you’re financially covered if your old home’s closing process is delayed.

To qualify for a bridge loan in Columbus, most lenders require:

• Significant home equity
• Good credit
• Sufficient income
• An active listing for your current home

What does a bridge loan look like?

Since bridge loans can be structured differently, the example calculator below can help you visualize what a bridge financing solution might look like.

Adjust the values to see an estimated monthly interest payment, available proceeds, and the balloon payment due when the loan is repaid.

Is a bridge loan the best way to buy before you sell in Columbus?

For a long time, bridge loans were pretty much your only option if you wanted to touch your home equity before you sold. Today’s market offers a lot more.

In addition to traditional bridge financing, some companies now offer modern Buy Before You Sell programs designed with the challenges of simultaneous buying and selling in mind.

These programs can help homeowners:

• Easily access home equity before selling
• Make non-contingent offers
• Only have to move once
• Prepare and market their old home after moving out

For many Columbus homeowners, these newer solutions may be worth comparing alongside a traditional bridge loan, especially if you need more agility in Central Ohio’s competitive market. 

A simpler alternative: HomeLight Buy Before You Sell

HomeLight’s Buy Before You Sell program is designed to help homeowners unlock equity from their current property so they can purchase their next home before selling.

Unlike a traditional bridge loan, the program combines financing and selling support into a single process.

Together with your real estate agent, HomeLight can help you:

• Unlock equity from your current home
• Make a stronger offer on your next home
• Move before listing your old property
• Sell an unoccupied home, making it easier to stage, show, and sell quickly

How HomeLight Buy Before You Sell works

1. Apply with no obligation

Find out whether your home qualifies and receive an estimate of your equity unlock.

2. Buy your next home with confidence

Use your unlocked equity to make a competitive offer without a home sale contingency.

3. Sell your former home with peace of mind

Whether you’re selling a historic home in Clintonville or moving out to a new build in New Albany, you can list your previous home after you’ve already moved, making it easier to prepare and even stage for buyers to get the strongest offer possible.

To learn more or get started, visit homelight.com/buy-before-you-sell.

The benefits of bridge financing

Whether you choose a traditional bridge loan or a Buy Before You Sell program, both approaches are designed to help you buy your next home before selling your current one.

HomeLight’s Buy Before You Sell program also combines financing and selling support from top Columbus experts into a streamlined experience to simplify the process from purchase to sale.

What should you consider before using a bridge loan?

Bridge financing can be appealing if you don’t want to miss out on a move to a sought-after Columbus suburb or a home that gives you a shorter commute. Consider the tradeoffs before moving forward.

• Higher borrowing costs: Expect higher interest rates and closing fees compared to a standard mortgage.
• Stricter qualifications: Some non-negotiables for lenders are usually strong credit, sufficient income, and substantial home equity.
• Temporary overlap: If the loan isn’t structured to defer payments, you could find yourself juggling both home payments at once.
• Repayment depends on your sale: If your current home takes longer to sell, your financing costs may increase.
• Fewer lender options: Not all lenders offer bridge loans, so finding the right program can take extra time and research.

Find a Top Columbus Agent With Experience in Bridge Loans

Partner with a top agent who knows your Columbus market and has experience with bridge loan programs. HomeLight can connect you with an experienced buyer’s agent who can help you navigate your entire homebuying journey.

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When is a bridge loan a good solution in Columbus?

Here’s when a bridge loan may make sense:

• You need equity from your current home for a down payment
• You’ve already found a home that better fits your household’s needs
• Your contingent offers aren’t competitive enough in today’s market
• You’re relocating for work or making room for a growing family
• You want to move out before preparing your current home for sale
• You’d rather make one seamless move into your next home
• You can comfortably qualify for both transactions

How much does a bridge loan cost in Columbus?

A typical bridge loan in Columbus can cost between 8% to 11.75% in interest, with origination and closing fees adding an extra 1% to 2.5% of the total loan amount. The exact cost will depend on your loan-to-value (LTV) ratio, credit score, property type, and the lender you work with.

Home values tend to be higher in sought-after Central Ohio suburbs like Dublin or neighborhoods near Intel in New Albany, meaning buyers in these areas can face higher interest costs even when general rates remain the same. 

And since bridge financing is temporary and specialized, rates are often higher than those for a traditional mortgage. To get a general idea of how different loan amounts and rates can affect monthly payments and payoff costs, try out the bridge loan snapshot tool above.

Who provides bridge loans in Columbus?

Due to underwriting requirements (rules you have to meet to prove you can pay back a loan), fewer institutions offer bridge loans. You’ll most likely find bridge loans at:

• Mortgage lenders
• Regional banks
• Credit unions
• Hard-money lenders
• Non-qualified mortgage (non-QM) lenders

It may be worth comparing multiple lenders before applying since their products can vary.

Are there other alternatives to bridge loans in Columbus?

You also have other ways to access your equity before buying your next home. Whether you’re moving between historic Columbus neighborhoods, relocating out to a high-demand school district, or downsizing from a large family home to a downtown condo, several financing options can help you reach your goals.

Home equity loan

A home equity loan lets you borrow a lump sum against the equity you’ve built in your current home. You’ll typically receive the money all at once and repay it through fixed monthly payments.

This option may work well if you know exactly how much cash you’ll need and want predictable payments. However, you’ll still be taking on an additional loan while you own your current home.

Home equity line of credit (HELOC)

Think of a HELOC as a credit card where your house acts as the security deposit. Instead of receiving one lump sum, you’ll have access to a revolving line of credit that you can draw from as needed.

If you’re planning a move within the Columbus area but haven’t yet found your next home, this flexibility can be helpful since they often have lower initial borrowing costs than bridge loans. 

However, most HELOCs have variable interest rates, meaning your monthly payment could change over time.

Cash-out refinance

A cash-out refinance allows you to replace your current mortgage with a new, larger loan and receive the difference in cash.

This option can be useful when mortgage rates are favorable, but it may be less appealing for homeowners who already locked in a low interest rate and don’t want to replace their existing mortgage.

80-10-10 (piggyback) loan

A piggyback loan combines a first mortgage and a second mortgage to help fund a new home purchase with as little as 10% down.

This strategy can help some Columbus buyers avoid private mortgage insurance (PMI), but it also means you might have to manage multiple loan payments until your current home sells.

Home sale contingency

Another common option is to make an offer contingent on the sale of your current home. This can help reduce financial risk because you won’t be purchasing a new home until your existing property sells.

The problem many people face is that these offers are usually less competitive, so you might be picturing how your family will fit in the home, only to find that the seller has gone with another offer. A financing solution like HomeLight’s Buy Before You Sell lets you remove a home sale contingency without selling your house first.