How Bridge Loans in Nashville, TN Can Help You Buy Before You Sell

A simpler alternative: HomeLight Buy Before You Sell

HomeLight’s Buy Before You Sell program was made to help homeowners unlock equity from their current property so they can purchase their next home before selling. It’s different from a traditional bridge loan since you’ll have both financing and selling support in one.

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 prior to listing your old property
• Stage and market your home once you’ve moved out

How HomeLight Buy Before You Sell works

1. 1. Apply without obligation

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

1. 1. 2. Buy your next home with more predictability

Use this unlocked equity to make a more competitive offer, without waiting for your current home to sell.

1. 1. 3. Sell your former home on your own terms

After settling into your new home, you can list your previous property once it’s vacant and potentially stage it to bring in a stronger offer. This can be especially useful when your existing home is competing with Nashville properties that may already be move-in-ready.

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

The benefits of bridge financing

While both solutions allow you to buy your new home before selling your current one, which one you choose ultimately depends on your personal priorities. If you want an all-in-one process — combining equity financing with selling support from top Nashville experts — HomeLight’s Buy Before You Sell program could be worth considering. 

What should you consider before using a bridge loan?

Nashville’s desirable, growing market means that buying before you sell can be useful, but you should consider the tradeoffs as well.

1. 1. • Higher borrowing costs: Expect higher interest rates and closing fees compared to a standard mortgage.
      • The bar is higher to qualify: Lenders look for excellent credit, high income, and enough existing equity before approving a loan on your current property.
      • Overlapping payments: You could temporarily carry the costs of two homes at the same time, depending on the way your loan is structured.
      • Repayment depends on your sale: With Nashville buyers having more homes to choose from, your current property could take longer than expected to sell. 
      • Fewer lender options: Not all lenders in Nashville offer bridge loans, so finding the right program can take some more research.

When is a bridge loan a good solution in Nashville?

According to U.S. News, an increasing number of buyers are getting “cold feet” and backing out of purchase agreements late in the process due to higher rates and economic uncertainty. That’s worth keeping in mind in Nashville, where buyers have more leverage and homes are taking longer to sell. 

You could benefit from a bridge loan when you:

1. 1. • Have found a home that gives you more space without giving up the commute you want
      • Are moving from Nashville to a surrounding community and need your existing equity for the purchase
      • Have found the right home before selling your current one
      • Don’t want a home sale contingency to weaken your offer
      • Are buying new construction with a closing timeline that doesn’t line up neatly with your sale
      • Need to move quickly for a new job or a sudden life change
      • Want to move out before preparing your current home for sale
      • Prefer to move directly into your new house
      • Can comfortably qualify for both transactions

How much does a bridge loan cost in Nashville?

Bridge loans typically carry interest rates between 8% and 12%, with origination and closing fees adding an extra 1% to 3% to the total loan amount. 

Where you’re moving within the Nashville area can influence how much bridge financing you need. If you’re selling closer to Nashville and buying farther out for more space, you may have enough equity to cover much of the next down payment, while someone moving into a higher-priced market like Williamson County may need to borrow more.

New construction is another element. If you’re using a bridge loan to buy a newly-built Nashville home, changes to the builder’s completion or closing schedule can affect how long you carry the loan.

Ultimately, the exact cost will depend on your loan-to-value (LTV) ratio, credit score, property type, and the lender you work with. And remember that it’s temporary and specialized, which typically makes the rates more expensive. 

If you’d like an idea of how different amounts and rates can affect your monthly payments and payoff costs, use the bridge loan snapshot tool above.

Who provides bridge loans in Nashville?

Since bridge loans have strict underwriting requirements, they aren’t offered by every financial institution. When shopping for one in Nashville, your best bet to get one is usually:

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

Each lender structures bridge loans differently, so you may need to compare quotes from several providers.

Are there other alternatives to bridge loans in Nashville, TN?

A bridge loan isn’t the only way to access equity before buying your next home, so comparing these equity alternatives can help you find a strategy that aligns with your finances, timeline, and built-up equity.

Home equity loan

A home equity loan lets you borrow a lump sum of cash upfront, using your home’s earned equity as collateral. You’ll then repay it in fixed monthly installments. 

It’s worth considering if you know your exact costs and want budget certainty, but it does mean managing an extra loan until your current home sells.

Home equity line of credit (HELOC)

A HELOC works more like a credit card backed by your home. Instead of receiving one lump sum, you’ll be able to access a revolving line of credit that you can draw from as needed.

While HELOCs usually have lower upfront costs than bridge loans, their interest rates fluctuate, so your monthly payments can change over time.

Cash-out refinance

A cash-out refinance resets your mortgage into a larger loan so you can take out the difference in cash. 

This is a great option when borrowing rates are low, but it might not be worth it for Nashville homeowners who’ve already locked in a low rate years ago and don’t want to trade it for a more expensive mortgage.

80-10-10 (piggyback) loan

A piggyback loan combines a first mortgage and a second mortgage so you can buy your next home with just 10% down.

Buyers often use this strategy to avoid private mortgage insurance (PMI), but it can also mean handling multiple loan payments until your existing home closes.

Home sale contingency

You can also make an offer that has a home sale contingency. While this reduces risk, since you won’t be purchasing a new home until your existing one sells, many sellers find these offers to be less desirable. You might end up missing out on a home you love, which might be why you wanted to pursue a bridge loan in the first place.

Solutions like HomeLight’s Buy Before You Sell bypass this issue by letting you remove a home sale contingency without selling your house first.