Bridge Loans in Colorado: Buy the Next Home Before You Sell This One

The short answer

Bridge loans in Colorado come from local banks, credit unions and portfolio lenders, not from the big national servicers, and every one of them wants the old home priced to sell inside the term. Our lender partner runs the bridge, the equity line and the new mortgage as one file so the three closings line up.

How much equity you can use

Every lender stops at 80 percent of the current home's value across all loans on it. Subtract what you owe and the rest is the down payment on the next home. The value is the number that matters, and it comes from the last 90 days of sales within a mile, not the county assessor and not a portal estimate; the Smart Pricing Report on home valuation pins it, and the equity math by itself is on home equity.

The four ways to buy before you sell, priced

The buy-first timeline

1. Day 0: Smart Pricing Report on the current home, pre-approval on the next one with both payments in the ratio. Open the equity line now if you have the lead time; otherwise the bridge application.
2. Day 14: equity line or bridge approved. Shop with a clean, non-contingent offer. The bigger-home search.
3. Day 30: under contract on the new home with a 30-day close.
4. Day 60: close and move. The old home goes on the market empty, cleaned and staged, which sells faster and for more than a lived-in listing.
5. Day 65 to 120: old home under contract and closed; the bridge or line is paid from proceeds at the closing table.

The rules that stop files

• Ratios with two payments. The new mortgage, the old mortgage and the bridge interest all count until the old home is under contract with contingencies cleared. A buyer at 38 percent on one house is at 55 on two.
• Reserves. Lenders want six months of both payments in the bank after closing when the old home is not yet sold.
• A listed home and a new equity line. Order matters: line first, listing second.
• Pricing from hope. A bridge comes due; a home priced 5 percent over the comps sits past the term. Price it from the report.
• Second homes and rentals. The 80 percent ceiling drops to 70 or 75 on a home you do not live in.

Who buys first

Questions move-up buyers ask about bridge loans

What is a bridge loan in Colorado?

A short loan, six to twelve months, secured by the home you already own, that turns your equity into the down payment on the next home before the old one sells. It is interest-only, it costs 9 to 11 percent plus 1 to 3 points, and it is paid off from the sale. The equity side of the math is on home equity.

How much can I borrow on a bridge loan?

Up to 80 percent of your current home's value minus the mortgage on it. A $650,000 home with a $280,000 balance supports about $240,000. Your value is on home valuation; the Smart Pricing Report pins it to the dollar.

Do both house payments count against me?

Yes, until the old home is under contract with the contingencies cleared; at that point the lender drops its payment from the ratio. That is why most Colorado move-up buyers list first, go under contract, then buy with a 45-day close. The full ratio run is on mortgage pre-approval.

Is a home equity line cheaper than a bridge loan?

Yes, by about $6,600 on a $240,000 gap over six months, and it has no points. The catch: open it before you list. Lenders decline a new equity line on a home that is listed for sale. The line pays off at your closing like any lien.

Can I just make a contingent offer instead?

Yes, and on a home that has sat 30 days or more it works. On a fresh listing with other offers, a sale contingency loses to a clean offer at the same price. We write contingent offers with a kick-out clause and a 48-hour response so the seller keeps marketing; how it is structured is on making an offer on a Colorado home.

What is a rent-back and how long can it run?

You sell first and rent your own home back from the buyer for 30 to 60 days while you close on the next one. Conventional lenders cap the buyer's rent-back at 60 days. It costs you rent at the buyer's mortgage payment and nothing in interest or points.

Should I sell now or wait for rates to drop?

Sell when the move makes sense, because the home you are buying moves with the same market. A rate drop raises the price of the next home too. The city-by-city read on days on market and inventory is on why a Colorado house is not selling and selling a home in Colorado.

How much equity do I have in my home?

Today's value minus every loan on it. The value comes from the last 90 days of sales within a mile, not the tax notice and not a portal estimate. City pages: Parker, Castle Rock, Highlands Ranch, Littleton, Centennial, Aurora, Lakewood, Fort Collins, Colorado Springs.

Can I use a bridge loan to buy a bigger home before the baby comes or the parents move in?

Yes, and the timeline is the reason to: close the bigger home, move in on your own schedule, then list the old home empty and staged, which sells faster and for more. The bigger-home paths are on buying a bigger home in Colorado; the multigenerational homes on Colorado multigenerational homes.

What if the old home does not sell before the bridge comes due?

You extend once, for a fee, or you cut the price. A home priced from the Smart Pricing Report sells inside the bridge term; a home priced from hope does not. If it still has not moved, a cash offer on it closes in 10 days: Denver cash home buyers.