Bridge Loan vs Construction Loan: Key Differences
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Quick Facts
Bridge loans
Short-term acquisition and transition financing
Construction loans
Fund building and renovation projects
Bridge
24 months terms from 8.75%, up to 75% LTV
Key Fact
Both available through LYNK Mortgage
Key Fact
Bridge funds faster; construction disperses as work progresses
Bridge and construction loans serve different investment purposes. Bridge loans provide acquisition capital and short-term financing, while construction loans fund development projects. Understanding the distinctions helps you select appropriate financing for your strategy.
Purpose and Use Cases
Bridge loans finance acquisitions and interim periods between buying and selling or refinancing. They provide liquidity for down payments, cover carrying costs, and bridge value-add transitions. Construction loans, conversely, fund building costs from foundation through completion. LYNK Mortgage bridge loans excel for investors purchasing undervalued properties or acquiring before permanent financing closes. Construction loans distribute funds in draws tied to construction milestones, making them ideal for new development, major renovations, and ground-up projects where you need progress-based capital deployment.
Loan Terms and Underwriting Focus
Bridge loans emphasize exit strategy and timeline clarity. Underwriters evaluate your plan to repay through sale, refinancing, or capital deployment. LYNK Mortgage bridge loans typically run 24 months at fixed rates from 8.75%, focusing on property equity and your ability to execute your exit. Construction loans emphasize project scope, timeline, and contractor competence. They fund progressively through completion, with rates potentially fluctuating based on construction phase. Construction underwriting requires detailed cost estimates, architectural plans, and contractor experience verification.
Cost, Timing, and Repayment Structures
Bridge loans close quickly—as few as 10 days with LYNK Mortgage—with straightforward interest-only or amortized payments. Prepayment is penalty-free, offering flexibility. Construction loans fund over 12-36 months through scheduled draws, delaying full repayment until project completion. Interest may accrue during construction, converting to permanent financing at completion. LYNK Mortgage bridge loans provide certainty through fixed terms and rates, while construction loans require ongoing compliance monitoring and draw documentation as work progresses.
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LYNK Mortgage offers fix & flip loans, new construction loans, multi-family bridge loans, and DSCR rental loans to real estate investors.
Disclaimers: LYNK Mortgage makes loans solely for business purposes (and not for personal or consumer use) and is exempt from licensing in all states in which it operates. LYNK Mortgage does not lend on owner-occupied properties. Listed rates, terms, and conditions are offered only to qualified borrowers, may vary by loan product, deal structure, property state, or other applicable considerations, and are subject to change at any time without notice. No information on this site is intended to, or shall, create a legally binding commitment or obligation on the part of LYNK Mortgage and all terms are expressly subject to LYNK Mortgage's credit, legal, and investment approval process.
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