Also known as a swing loan or gap loan, is a short-term loan that acts as a "bridge" between selling your current home and buying a new one. Bridge loans are used to provide financing during a transitionary period, such as moving from one house to another. They allow the borrower to meet current obligations by providing immediate cash flow.
Bridge loans are secured by a portion of the equity in your current home, even if it's for sale, to use toward the down payment on a new home. They are usually paid back within 12 months, and most people pay off their loans with money from the sale of the property they bought.