Example:
Mr. Jones is purchasing his new home and needs to close on May 1st, he will be selling his current home and closing on May 25th. The problem he has is that he needs the funds form the sale of his current home to purchase the new home and there is a 25 day gap between the closings. To solve his problem he will need to obtain a short term loan on his current homes equity to fund the new purchase. A bridge loan would accomplish this and be in the form of a lien on his current property which would be paid off apon its sale

1)You have a Purchase and Sales Agreement on both properties clearly showing the gap in closings. The purpose of this requirement is to ensure that you will not being carrying the costs of both houses and a Bridge Loan for an extended period of time thereby creating financial difficulties. If you do not have Agreements on both properties the lender will have to assume that you will have all three loans indefinitely in most cases making it virtually impossible to qualify for.

2)You have enough income to qualify for your new loan carrying both the Bridge Loan and the loan on the current home as debts. In this scenario the lender will not care if you ever sell the current home because they will be comfortable that you can afford the payments in that event.