A simpler alternative: HomeLight Buy Before You Sell
HomeLight’s Buy Before You Sell program was created to help homeowners unlock equity from their current property so they can purchase their next home before selling.
Unlike a traditional bridge loan, it 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
- Sell an unoccupied home that may be easier to stage and show
How HomeLight Buy Before You Sell works
- Apply with no obligation
Find out whether your home qualifies and receive an estimate of your equity unlock.
- Give yourself leverage on your next home purchase
Use your unlocked equity to make a competitive offer without a home sale contingency.
- Sell your former home without being rushed
You can list your previous home after you’ve already moved, making it easier to prepare and even stage to help attract a strong offer.
If you want to learn more or get started, visit homelight.com/buy-before-you-sell.
The benefits of bridge financing
| Benefits of bridge financing | Additional benefits with Buy Before You Sell |
| Access your equity upfront | A simplified, guided process |
| Make stronger, non-contingent offers | Move fast when the right house hits the market |
| Avoid moving twice | Sell your home once it’s vacant |
| Buy on your timeline | Potentially maximize your sale price |
Both of these approaches are designed to help you buy your next home before selling your current one, which is likely your main goal. What you choose depends on your other priorities.
You might consider the Buy Before You Sell program by HomeLight if you want both financing and selling support from top Detroit experts in one experience.
What should you consider before using a bridge loan?
Many Detroit homes might benefit from repairs, painting, or staging before listing. While a bridge loan can provide flexibility during that process, it’s important to understand the added borrowing costs and requirements.
- Higher pricing: They often come with more expensive rates and fees than traditional mortgages.
- Stricter standards: Lenders may require you to have enough income and equity, plus strong credit.
- Payment overlap: You might find yourself managing both house payments at once (depending on how the loan is structured).
- Dependent on your sale: If your current property takes longer to sell, your financing costs may increase.
- Fewer options available: Not all lenders offer bridge loans, so finding the right program can take more research.
When is a bridge loan a good solution in Detroit?
A bridge loan may be a worthwhile option if you:
- Need equity from your current home for a down payment
- Can’t risk letting a home you want sit on the market
- Your offer keeps losing out to buyers who don’t have contingencies attached
- Need to relocate for work
- Want to move out before preparing an older home for sale
- Want to move directly into your new house without delay
- Can comfortably qualify for both transactions
How much does a bridge loan cost in Detroit?
Bridge loans in Detroit often carry interest rates between 8% and 12%, with origination and closing fees adding an extra 1% to 3% of the total loan amount. The exact cost will rely on your loan-to-value (LTV) ratio, credit score, property type, and the lender you work with.
In parts of the Detroit market where home values vary significantly from one neighborhood to the next, the appraised value of your current home can have a meaningful impact on how much equity you can borrow. Borrowers with more equity (and therefore a lower loan-to-value (LTV) ratio) may qualify for better pricing, while higher LTV ratios can lead to higher rates or fees.
If you want to get a general idea of how different loan amounts and rates may affect your monthly payments and payoff costs, try out the bridge loan snapshot tool above.
Who provides bridge loans in Detroit?
Due to underwriting requirements, it can be challenging to find an institution that offers a bridge loan. The most likely sources are:
- Mortgage lenders
- Regional banks
- Credit unions
- Hard-money lenders
- Non-qualified mortgage (non-QM) lenders
Because their products can vary quite a bit, it’s usually worth comparing multiple lenders before applying.
Are there other alternatives to bridge loans in Detroit?
There are other ways to access your equity before buying your next home.
If you’re moving from an older home or buying in a neighborhood where you don’t want to lose out on the right property, it’s worth comparing several ways to access your equity before buying.
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 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.
If you’re still deciding where in Detroit you’d like to move, a HELOC gives you flexibility while you continue your home search.
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 Detroit 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.
