What Is a Bridge Loan? Definition & How It Works

Bridge loans are temporary financing designed to 'bridge' a timing gap. The most common scenario: you find a great deal but haven't sold your current property yet. Traditional banks take 30–60 days to approve and fund mortgages. A bridge loan lets you close on the new acquisition in 10 days with LYNK Mortgage, then repay the bridge when your original property sells. This eliminates the pressure to drop your price to meet the buyer's timeline. Bridge loans also serve investors who acquire distressed properties, stabilize them (make repairs, lease up units), then refinance into long-term conventional or DSCR financing at better rates. The bridge is temporary—you're not paying the higher interest rate forever, just while you reposition or wait for sale proceeds.

LYNK Mortgage bridge loans typically run 6–24 months, with closing possible in as few as 10 days. Rates start at 8.75% for strong borrowers with significant equity. You pay interest only during the term (30-day, 60-day, or quarterly payment schedules), then repay the principal when the property sells or refinances. Loan amounts reach 75% LTV, meaning a $1 million property with $250K down gets $750K financed. Some investors compare bridge loans to hard money, but LYNK Mortgage's bridge product offers better rates (8.75% vs. 10%+ hard money) and faster closing. Bridge loans are structured to limit personal exposure where possible—the lender's recourse is limited to the property itself, not your personal assets—though recourse terms vary by deal structure.

Scenario one: acquisition bridge. You identify a below-market deal, but your current property hasn't sold. Bridge financing lets you lock in the deal today without waiting for your sale to close. Scenario two: stabilization bridge. You buy a distressed multifamily property at 60% market value, spend 6 months stabilizing it (tenant acquisition, unit repairs), then refinance into DSCR financing at market value. The bridge covers acquisition and initial carry; DSCR refinancing replaces it. Scenario three: fix-and-flip hybrid. You use a fix-and-flip loan for acquisition and rehab, but need an extra 3 months to lease up before exiting. A brief bridge extension covers that gap. LYNK Mortgage works with experienced investors to structure bridges around their specific timeline and exit strategy, ensuring the loan aligns with your business plan.