Found the right Edina home before your current place is under contract? In a market where desirable listings move quickly, timing can make or break your offer. A bridge loan can unlock your equity so you can act now, then pay it off when your home sells. In this guide, you’ll learn how bridge loans work in Edina, what they cost, the risks to weigh, smart alternatives, and a simple step-by-step plan to use one with confidence. Let’s dive in.
Bridge loan basics
A bridge loan is short-term financing that helps you buy a new home before you sell your current one. It typically lasts a few months up to about a year and can cover a down payment or even pay off your existing mortgage so you can close on time. For a plain‑English overview, see this explanation of bridge loans and timelines from NerdWallet. (What is a bridge loan?)
Common structures you’ll see:
- Down payment bridge. A smaller lump sum that covers the down payment on your new home while your current home is listed and sold. (How bridge loans work)
- Payoff bridge, sometimes called a swing loan. A larger loan that can pay off your existing mortgage and fund the new purchase, usually secured by your current home or by both properties. (Bridge loan mechanics and costs)
Bridge loans are secured by real estate and often carry higher rates and fees than conventional mortgages because of their short term and timing risk. (Why bridge loans cost more)
Why speed matters in Edina
As of July 2025, Minnesota Realtors reported the Twin Cities metro median sale price in roughly the 395,000 to 401,000 dollar range, with lean inventory around two to three months of supply. That setup favors sellers and often leads to multiple offers on well-priced homes. (Twin Cities market snapshot)
Edina sits above the metro median with shorter days on market in many neighborhoods. Micro-markets near 50th & France and Lake Edina can move especially fast. In these areas, sellers value certainty. Showing you can close without waiting on a sale can give your offer a meaningful edge.
How bridge financing strengthens your offer
- Reduce or remove a sale contingency. By unlocking equity now, you can present a cleaner offer that is more attractive to sellers. (Bridge loan basics)
- Close faster. With funds ready for your down payment, you can meet tighter timelines that sellers often prefer. Some lenders can fund in a few days to two weeks, which helps you match a quick close. (Funding speed overview)
- Improve negotiating position. In competitive Edina segments, speed and certainty can help you win against similarly priced offers.
How it works: a simple timeline
- Apply and pre-approve. Talk to your lender about a bridge loan option and get pre-approved for both your new mortgage and the bridge amount.
- Run the numbers. Confirm available equity, expected loan amount, rate type, and whether payments are interest-only.
- Make your offer. Write a competitive offer on the new home without a sale contingency if advised by your agent and lender.
- Close on the new home. Use bridge funds for your down payment or to pay off the old mortgage so you can close on time. Funding can be as fast as a few days to about two weeks depending on lender and documentation. (Bridge timelines)
- List and sell your current home. Price and present it to move quickly in the Edina micro-market you are in.
- Pay off the bridge. When your sale closes, the title company pays off the bridge loan and any remaining liens as part of settlement.
Costs and risks to weigh
- Rates and fees are higher. Bridge loan rates are often several percentage points above conventional mortgages, plus origination and closing costs. Always get live quotes. (Cost overview)
- Interest-only with a balloon payoff. Many bridges require interest-only payments during the term, then a lump-sum payoff at sale or refinance. (Payment structure basics)
- Two payments risk. If your home takes longer to sell, you may carry two mortgages plus bridge interest, which can strain cash flow. (Understanding the risk)
- Lien position and title. Bridge loans are recorded against your property and can be first or second liens. Know how this affects refinancing and payoff. (Lien and title considerations)
- Appraisal and equity limits. Lenders often cap lending to a percentage of combined property values, so lower appraisals can reduce available funds. (How lenders size bridge loans)
Who is a good fit
Strong candidates:
- Move-up buyers with solid equity and a home likely to sell quickly at market price.
- Buyers with enough reserves to cover two payments for a time and a clear repayment plan.
- Buyers targeting fast-moving Edina neighborhoods where removing contingencies can materially improve odds.
Think twice if:
- Cash reserves are tight or credit is marginal.
- You have more time and could use a lower-cost option.
Smart alternatives to compare
- HELOC or home equity loan. Often lower rates and flexible access to equity, but limits depend on your current equity and underwriting can take time. (HELOC vs. bridge overview)
- Cash-out refinance. Can deliver needed funds at a lower rate, but usually takes longer and may not pencil if current rates are high. (Cash-out basics)
- Seller-friendly timing strategies. A sale contingency, rent-back, or flexible closing date can work in some cases. In hotter Edina segments, these may be less attractive to sellers but cost less for you.
Local closing details to know
- Property tax timing. Minnesota property taxes are typically due in two installments on May 15 and October 15, and prorations at closing are standard based on the date you close. Your title company will handle the math. (Minnesota tax due dates)
- Recording and payoff. Bridge loans are recorded in county land records. The title company coordinates payoff with sale proceeds, and your lender should explain lien position and discharge steps. (Title and lien basics)
- Funding speed. Plan ahead for underwriting and appraisals. Some lenders can fund a bridge in roughly a few days to two weeks if documentation is ready. (Timeline reference)
What to ask your lender
- What is the exact interest rate, and is it fixed or variable?
- Are payments interest-only, and when is principal due?
- What is the term length, and what are the costs for extension or early payoff?
- What are the upfront fees and the all-in cost for my expected term?
- What lien position will you take, and which property secures the loan?
- How will payoff work at my sale closing, and what will the title company need?
- What is the timeline from application to funding, and which documents should I prepare now?
Next steps in Edina
If you plan to buy before you sell, prepare early. Get pre-approved for both your mortgage and a bridge option, know your numbers, and design an offer strategy that fits the micro-market you are targeting. Pricing, staging, and a clear listing timeline for your current home are essential to reduce carrying time.
For a strategy built around speed and certainty in Edina’s premium neighborhoods, partner with a local expert who lives the data and the contracts. If you are ready to move, connect with Josh Sprague to map your options and compete with confidence.
FAQs
What is a bridge loan when buying before selling in Edina?
- A bridge loan is short-term financing that taps your home equity so you can buy now and repay the loan when your current home sells, usually within a few months to a year. (Bridge loan basics)
How fast can a bridge loan fund in Minnesota?
- Funding timelines vary by lender, but many can close a bridge in a few days to about two weeks if your documentation and appraisals are ready. (Funding speed overview)
How much do bridge loans cost compared to a mortgage?
- Bridge loans often have higher rates than 30-year mortgages plus origination and closing fees, so get live quotes and compare the all-in cost for your expected term. (Cost overview)
What happens if my current Edina home takes longer to sell?
- You may carry two payments plus bridge interest longer than planned, and you might need an extension that adds cost, so build a conservative cash plan. (Risk considerations)
How are Minnesota property taxes handled when I use a bridge loan?
- Property taxes are prorated at closing based on the date you close, and Minnesota installments are typically due May 15 and October 15, which your title company will account for. (Tax schedule reference)
