Bridge financing is a short-term loan you get when you buy a new home but your old home closes after the new home.
The bridge covers your down payment on the new home until your old home sells and you can access its equity.
The amount of bridge loan equals:
The purchase price of your new house
Your current home’s mortgage balance
The deposit on the new home.
This leaves you with the amount that must be bridged (financed) until your old home sells.