What is a bridge loan? Buy your next home without the wait

It’s a short-term financing option that lets you move forward with buying your new home while your existing one is still on the market.

At Westerra Credit Union, we’re here to help you take that next step with confidence.

What is a bridge loan?

A bridge loan allows you to borrow against the equity in your current home to fund the down payment on a new primary residence. It’s designed for homeowners who want to buy before they sell, giving you flexibility in a competitive market.

Here’s how it works:

• You use the equity in your current home to secure the loan

• The loan is repaid once your current home sells

Bridge loans are short term, typically lasting six to 12 months, and may offer interest-only payments during the term.

Who can use a bridge loan?

Bridge loans are available for:

• Primary residences

• Second or vacation homes

If the new property is not your primary residence, a letter of intent and location analysis will be required to verify that the new property will be used as a secondary residence or vacation home.

Eligible property types

Westerra supports a wide range of residential property types, including:

• Single-family homes (attached or detached)

• Two-family homes

• Condominiums (one to four stories and over five stories)

• Planned unit developments (PUDs), both attached and detached

Important guidelines to know

• All proceeds must be used for the down payment on a new primary residence or second home

• The new home must be financed with a first mortgage through Westerra Credit Union

• Cash back is not allowed

• Bridge loan funds are disbursed directly to the title company at the time of closing

Why use a bridge loan?

In Colorado’s fast-paced housing market, timing matters. A bridge loan helps you:

• Make a strong offer without a home sale contingency

• Avoid the hassle of temporary housing or moving twice

• Use your home’s equity without waiting for it to sell

• Transition smoothly into your new home

Is a bridge loan right for you?

A bridge loan may be a good fit if:

• You’ve found a new home and need funds for the down payment

• You have enough equity in your current home

• You plan to finance your new home through Westerra Credit Union

• You want to avoid the stress of selling and buying at the same time

• You can afford the new-purchase mortgage payment as well as your current mortgage and bridge loan

Explore more specialty mortgage solutions

Bridge loans are just one way Westerra helps you handle money with confidence. We offer a range of specialty mortgage options designed to support your goals, whether you’re upgrading, relocating or building something new.

Learn more about Westerra’s specialty mortgage solutions here.