A simpler alternative: HomeLight Buy Before You Sell
HomeLight’s Buy Before You Sell program is designed to help homeowners unlock equity from their current property so they can purchase their next home before selling.
Unlike a traditional bridge loan, the program combines financing and selling support into a single process.
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 before listing your old property
- Stage and market your home once it’s vacant
How HomeLight Buy Before You Sell works
- Apply without obligation
Find out if your home qualifies and receive an equity unlock estimate.
- Buy your next home with more certainty
Use this unlocked equity to make a more competitive offer, without waiting for your current home to sell.
- Sell your former home on your schedule
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.
If you want to learn more or get started, visit homelight.com/buy-before-you-sell.
The benefits of bridge financing
| What bridge financing offers | What Buy Before You Sell can add |
| Equity access before selling | Guidance and a streamlined process |
| Ability to make stronger, non-contingent offers | Buying quickly when the right home becomes available |
| Moving only once | Selling after you’ve already moved out |
| Buying on your timeline | Potential to maximize your sale price |
Whether you choose a traditional bridge loan or a Buy Before You Sell program, both approaches are designed to help you buy your next home before selling your current one.
HomeLight’s Buy Before You Sell program combines financing and selling support from top Philadelphia experts into a single coordinated experience, making the process more manageable from purchase to sale.
What should you consider before using a bridge loan?
You may consider bridge financing if you’re competing against other buyers for a home that gives you an easier commute, but you should also consider what some of the tradeoffs are before moving forward.
- 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: Larger rural properties or older homes may take longer to sell than newer homes in more active markets, which could increase your financing costs.
- Fewer lender options: Not all lenders offer bridge loans, so finding the right program can take some more research.
When is a bridge loan a good solution in Philadelphia?
A bridge loan may be a wise choice if you:
- Need equity from your current home for a down payment
- Can’t risk letting a rowhome or townhome you want sit on the market
- Your offer keeps losing out to buyers, especially those from out of state, who don’t have contingencies attached
- Need to relocate on short notice
- Want to move out before preparing your current home for sale
- Want to move directly into your new house without waiting
- Can comfortably qualify for both transactions
How much does a bridge loan cost in Philadelphia?
A bridge loan in Philadelphia can cost between 8% to 12% in interest, with origination and closing fees adding an extra 1% to 3% of the total loan amount. The exact cost will depend on your loan-to-value (LTV) ratio, credit score, property type, and the lender you work with.
In Philadelphia’s diverse real estate market, the cost not only relies on how much you borrow but also on the type of property involved. If you’re dealing with a multi-family or mixed-use property, some lenders may have different requirements or charge higher rates and fees.
Remember that since bridge financing is temporary and specialized, rates are generally higher than those for a traditional mortgage. Test out the bridge loan snapshot tool above if you’d like an idea of how different loan amounts and rates could affect your monthly payments and payoff costs.
Who provides bridge loans in Philadelphia?
Because of underwriting requirements (rules you have to meet to prove you can pay back a loan), fewer institutions offer bridge loans. You can most commonly find them from:
- Mortgage lenders
- Regional banks
- Credit unions
- Hard-money lenders
- Non-qualified mortgage (non-QM) lenders
These sources often offer different products, so it’s worth comparing multiple lenders before applying.
Are there other alternatives to bridge loans in Philadelphia?
You can also access your equity in other ways besides a bridge loan.
If your upcoming move involves transitioning from a dense block to a low-maintenance home or a modern property with dedicated parking, one of these alternatives may be a better fit depending on your situation.
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, though it does mean carrying 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 Philly 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 weaker, so you might miss out on a home you love.
Solutions like HomeLight’s Buy Before You Sell bypass this issue by letting you remove a home sale contingency without selling your house first.
