| What it is | A revolving credit line secured by your home — draw what you need, when you need it. | A one-time lump sum secured by your home, repaid on a fixed schedule. | Replace your current mortgage with a larger one and take the difference in cash. | Short-term financing against your current home so you can buy before it sells. | A company gives you cash today in exchange for a share of your home’s future value. Not a loan, and not public assistance. | A company advances equity or backs your offer so you can buy first, then sells your old home. Commercial, not assistance. | Buy first with a larger mortgage, then apply the sale proceeds and have the payment recalculated. | Your offer on the new home depends on your current home selling. No financing product involved. | Sell first, then stay in the home as a tenant for a negotiated period while you buy. | A government-insured mortgage that finances the purchase or refinance plus the renovation in one loan. | A conventional mortgage that finances renovation costs alongside the home. | Buy the next home while holding the first as a rental. The hardest path to qualify for. |
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| New monthly payment? | Yes — a new payment once you draw, and it can rise when the draw period ends. | Yes — a predictable second payment starting immediately. | Yes, and it replaces your old one — often larger, and at a different rate than the loan you gave up. | Often yes, and potentially alongside both your old and new mortgage payments. | No — this is the feature people are drawn to, and the reason the eventual cost is easy to underestimate. | Sometimes — some programs charge a daily or monthly occupancy cost while you stay in the old home. | Yes — higher at first, lower after the recast. | None. | A negotiated daily or monthly occupancy charge, plus usually a security deposit. | Yes — a single mortgage payment. | Yes — a single mortgage payment. | Two mortgage payments, plus landlord costs, plus reserves the lender may require. |
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| Rate structure | Usually variable, so the payment can change over time. Some lenders offer fixed-rate lock options on portions of the balance. | Usually fixed, so the payment does not change. | Whatever the new mortgage carries. This is the crux: if your existing rate is low, refinancing gives it up on the whole balance. | Typically higher than a standard mortgage, reflecting the short term and the risk. | Not interest-bearing in the usual sense, which makes it hard to compare to a loan by rate. The effective cost depends entirely on how much the home appreciates. | Usually fee-based rather than rate-based, which makes it hard to compare against a bridge loan without doing the arithmetic. | Unchanged. A recast keeps your rate, unlike a refinance. | Not applicable. | Not applicable. | Standard mortgage rate structure for the product, plus FHA mortgage insurance. | Conventional mortgage terms; private mortgage insurance may apply depending on the down payment. | Unchanged on the existing loan — which is exactly why people consider this when their current rate is low. |
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| Claim on the home | Second lien behind your existing mortgage, unless you have no mortgage. | Second lien behind your existing mortgage. | First lien — it becomes your only mortgage. | Secured against the current home, usually behind the existing mortgage. | Typically secured by a lien or recorded interest against the home, restricting what you can do with it. | Varies by structure — may involve a lien, an option, or an outright sale of the home. | First lien on the new home. | None. | None — you no longer own the home. | First lien. | First lien. | Existing first lien stays; a new first lien on the new home. |
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| How it is repaid | Interest-only payments are common during the draw period, followed by a repayment period where principal is added. The balance is due in full when you sell. | Fixed monthly principal and interest from the first month. The remaining balance is due on sale. | One monthly payment on the new, larger loan. | Repaid in full from the sale of the current home, often within 6–12 months. Some are interest-only until then. | No monthly repayment. Instead you owe a settlement amount based on the home’s value at the end — which can be far more than you received if the home appreciates. | Settled when the current home sells, out of the proceeds, according to the contract. | Normal mortgage repayment, with a lower payment after the recast. | Not applicable — this is a contract term, not borrowing. | Not applicable — you pay occupancy costs, typically from proceeds you now hold. | One monthly mortgage payment covering both the home and the renovation. | One monthly mortgage payment. | Both mortgages continue on their own terms. |
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| When it comes due | At the end of the repayment period, or immediately on sale of the home. | End of the fixed term, or on sale of the home. | End of the new loan term, or on sale. | On sale of the current home, or at the end of a short fixed term — whichever comes first. | On sale, on refinance, or at the end of a fixed term (commonly 10–30 years) even if you have not sold. If the term ends and you have not sold, you must find a way to settle. | When the current home sells, or at the guarantee date. | Normal mortgage term. | At the contingency deadline in the contract. | At the end of the agreed occupancy period. Lengths are often limited, sometimes by the buyer’s own lender. | Normal mortgage term. | Normal mortgage term. | Normal mortgage terms. |
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| Getting out early | Generally allowed, but closing the line early within the first few years can trigger a fee at some lenders. | Usually allowed; check the note for any prepayment penalty. | Usually allowed. | Expected — that is the design. | Usually allowed via buyout, but the buyout is calculated from current home value — so paying early after appreciation can cost far more than the cash you received. | Governed by the contract, not by lending rules. | Normal mortgage rules. | Not applicable. | You can usually leave early; whether you get money back depends on the agreement. | Normal mortgage rules. | Normal mortgage rules. | Normal mortgage rules. |
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| Cost shape | Application, appraisal, and closing costs are common; some lenders waive them but add an early-closure fee. Annual fees exist at some lenders. | Closing costs similar to a smaller mortgage — origination, appraisal, title. | Full mortgage closing costs on the entire new loan amount. | Origination and closing costs for a loan you intend to hold only briefly, which makes the effective cost high. | Origination fee, appraisal, and closing costs, plus the equity share itself — which is the real cost and is not expressed as a fee. | Program fees, and in guaranteed-offer structures the difference between the guaranteed price and what the home might have fetched on the open market. | Usually a modest administrative fee, far below refinancing costs. | No direct cost, but it weakens your offer, which can cost you the home or a better price. | The occupancy charge, a deposit, and your own renters insurance for the period. | Mortgage closing costs, FHA mortgage insurance, plus fees tied to the renovation oversight and draws. | Mortgage closing costs plus renovation administration and inspection costs. | Landlord insurance, maintenance, vacancy, possible management fees, and tax consequences that need a professional. |
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