The loan is secured against the firm sale of your current home, so a lender generally requires a signed contract with the financing and other conditions already removed before approving one. It is repaid in full from your sale proceeds on your existing home's closing day, often the same day or within days of the new purchase closing.
Costs include interest for the bridging period, an administration fee and legal fees on top of the legal fees, typically $800 to $1,500, you are already paying for the purchase and sale themselves, so it is not a free convenience.
A bridge loan solves a timing problem, not a qualification problem. You still need to be able to carry the new mortgage once the bridge is repaid.
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