Bridge loans fund fast (7–21 days), cost more (points + rate), and are asset-based. Use cases: fix & flip, value-add multifamily, buying at auction, closing before a sale.
Loan Mechanics
Bridge Loan
Short-term financing (6–24 months) used to buy, stabilize, or reposition a property before permanent financing.
Also known as: hard-money loan
More in Loan Mechanics
- DSCR (Debt Service Coverage Ratio)— The ratio of a property's net operating income to its debt payments — a 1.25 DSCR means th…
- LTV (Loan-to-Value)— Loan amount divided by the property's appraised value, expressed as a percent.
- LTC (Loan-to-Cost)— Loan amount divided by total project cost (purchase + rehab).
- ARV (After-Repair Value)— The projected appraised value of a property after planned renovations are complete.
- DTI (Debt-to-Income Ratio)— Your total monthly debt payments divided by gross monthly income.
- APR (Annual Percentage Rate)— The all-in yearly cost of a loan, including interest rate plus most fees.