Synovus Bridge Loans Can Help Unlock Equity in Your Home

Loan-to-value (LTV) ratio on your existing house. Your loan-to-value ratio needs to be 80% or less when you factor in your current mortgage (if you have one). For example, let's say your house is worth $400,000 and you currently have a balance of $100,000 on your mortgage. The total you can borrow against your house is 80% (so $320,000). This means you could get up to $220,000 in a bridge loan (after you factor in your $100,000 existing mortgage). If your $400,000 house is already paid off, you could get a bridge loan for the full $320,000.

Income qualifications. It's not enough to have sufficient equity in your current house. You also need to establish that you have enough money to carry your existing mortgage, your monthly bridge loan payment (typically interest-only), and the mortgage on your new home, all at the same time. Depending on your income and the price you'd like to be qualified for on a new home, you may or may not qualify to borrow the maximum your LTV ratio would suggest.

Lender lower and upper limits. Lenders will typically set a minimum and a maximum amount for bridge loans. For example, at Synovus, you need to borrow a minimum of $100,000 to get a bridge loan — with an upper limit of $3 million.

What Are the Typical Terms on a Bridge Loan?

The terms may vary from lender to lender. At Synovus, we offer a fixed interest rate with interest-only payments. The loan duration is for six months, with the balance due when you sell your existing home. If your home does not sell within the first six months, your bridge loan can typically be extended for another six months. If you've had the bridge loan for one year and haven't sold your house, you'll need to find another way to pay off the principal.

Why Not Use a HELOC or a Cash-Out Refi Instead?

You can't get a HELOC or a Home Equity Loan or refinance once your home is listed for sale. Once your house is on the market, a bridge loan is your only option for tapping your current home's equity for a down payment on a new home.

As with a bridge loan, you only borrow the money once you actually need it, minimizing the amount of interest you'll pay.

How Long Does It Take to Get Approved for a Bridge Loan?

It depends on whether your lender can establish the value of our home without an appraisal and whether your house has a clear title. Once the bank has established the value of our current house and has confirmed that you have a clear title on the home, they should be able to approve you for the bridge loan within 48 hours.

Because you may need extra time for the title research and an appraisal, the time to talk to your lender about a bridge loan is now. They can help you figure out if you'll qualify for a bridge loan.

"If you qualify for a bridge loan, we can help you get through the approval process and ensure you have what you need to make an offer on a new home if you find one before your current home sells,” says Synovus Mortgage Area Sales Leader, Vice President, Carolyn Cargle.

If you do qualify, the lender can help you get through the approval process so you have what you need to make an offer on a new home if you should find one before your current house sells.

Once the lender has pulled your credit, and determined the value of your current home, the approval can be done within 48 hours contingent on clear title and appraisal. 

Learn more about bridge loans.