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What is a Bridge Loan

A bridge loan is a short-term loan that can be used for up to one year. Because of their short nature, bridge loans typically have higher interest rates. A buyer may use a bridge loan to purchase another home before they are able to sell their current home. Qualified buyers can also get a bridge loan to pay for a home at an auction. After the auction, they can apply for a mortgage loan to pay off the bridge loan and pay for the home over time.