Bridge Loans

Bridge loans in Florida let you close on your next home before the current one sells, so your offer carries no sale contingency.

Key features of bridge loans in Florida

• Short term, usually six to twelve months
• Draws on the equity in your current home to fund the new purchase
• Lets you close on the new home before the old one sells
• Removes the sale contingency, which strengthens your offer
• Prices above permanent financing, since the lender holds it briefly
• You repay it in full when the current home sells

Ask what happens if the house does not sell

Everything about a bridge loan is comfortable while the old home sells on schedule. The whole product rests on that assumption, so interrogate it before you sign.

During the bridge you carry both properties: two sets of taxes, two insurance policies, two sets of maintenance, plus any HOA dues. In Florida the insurance line alone makes this heavier than in most states. If the sale takes longer than you planned, that burden runs on.

Then the term ends. A bridge loan matures, usually at six or twelve months, and the balance comes due whether or not the house sold. Ask each lender three questions directly. Can the term be extended, and at what cost? What happens at maturity if the property is still listed? Is there a prepayment penalty if it sells in month two? The answers vary widely, and they matter far more than the rate.

Therefore price the loan honestly against the slower scenario, not the one in the brochure. If carrying both homes for nine months would strain you, the bridge is solving the wrong problem.

A cheaper alternative, but only if you act first

Before you list, consider opening a HELOC on your current home. It typically costs less than a bridge loan and gives you the same cash for a down payment. However, the timing is unforgiving: most lenders will not open or fund a home equity line on a property that is already listed for sale, and some close existing lines when they see a listing. Therefore the line must be in place before the sign goes up. Once you are on the market, the bridge loan is often the only option left.

Who this suits

• Homeowners buying in Florida before selling their current home
• Buyers in competitive markets where a contingent offer gets rejected
• Relocating families who must move on a fixed date
• Sellers who want to move out first and present an empty, staged home

Florida-specific notes

• Fast-moving markets such as South Florida and Tampa reward non-contingent offers
• Documentary stamp tax applies to the bridge loan as well, which adds cost you recover from nobody
• Budget for insurance on both properties, since Florida premiums make the carry heavier than buyers expect
• It removes the need for temporary housing and a second move

Bridge loan terms, extension options and prepayment penalties are set by each lender and vary widely. Florida documentary stamp tax follows Chapter 201, Florida Statutes. The CFPB owning a home guide covers comparing offers.