How Much Equity Do I Need for a Bridge Loan in Michigan?

How much equity do I need for a bridge loan?

Most bridge loan programs want to see meaningful equity in your current home — often in the range of 20% or more — before they'll lend against it. The more equity you have, the more buying power you free up and the better your terms tend to be. Homeowners sitting on 40% or 50% equity usually have the smoothest path.

But the honest answer is that it depends on your whole picture, not one magic number. Let me explain how equity actually gets counted and why it matters so much for your move.

What counts as home equity?

Equity is simply what your home is worth minus what you still owe on it. If your Livonia home would sell for $400,000 and you owe $220,000 on the mortgage, you have $180,000 in equity. That's the pool a bridge loan can draw from to fund your next purchase.

Two things move that number: your home's current market value and your remaining loan balance. In much of Michigan, values have risen over the past several years, which means a lot of homeowners have more equity than they realize — I see it constantly when we pull the numbers.

Why do lenders require a minimum?

Equity is the safety margin that makes a bridge loan work. The loan gets repaid when your current home sells, so the lender needs confidence that the sale will cover the bridge plus your existing mortgage with room to spare. Strong equity gives everyone — you included — a cushion if the market shifts or your home takes a little longer to sell.

It also directly shapes how much you can put toward the new home. More equity means a larger down payment on the next house, which can mean a stronger offer and better financing on the purchase side.

How much can I actually borrow against my equity?

Programs don't usually let you tap 100% of your equity; they lend up to a percentage of your home's value, leaving a margin. So on that $400,000 home with $180,000 of equity, you'd typically access a meaningful chunk of that equity for your down payment — not the entire amount. The exact figure depends on the program, your credit, and your ability to carry the financing short-term.

You can get a rough estimate before we ever talk by running your numbers through the equity calculator on our homepage, then confirm with the qualifier quiz.

What if I don't have enough equity yet?

If your equity is thin, a bridge loan may not be the right move, and I'd rather tell you that early than let you overextend. In that case there are other paths — a traditional sale-first approach, or reviewing your full set of home equity options to see what fits. Sometimes waiting a season while you pay down principal and values hold is the smarter play.

Frequently asked questions

Does my credit score matter if I have lots of equity?

Yes, both matter. Strong equity can help offset a credit score that isn't perfect, but lenders still look at how you manage debt. Our guide on credit score requirements for bridge loans walks through what to expect.

How do I know what my home is worth?

A real estate agent's comparative market analysis or a lender's valuation gives you a realistic number. Online estimates are a starting point, but they can be off — especially in mixed neighborhoods around Detroit and Grand Rapids where block-by-block values vary.

Can I use equity for both the down payment and closing costs?

Often, yes. The funds a bridge loan unlocks can cover the down payment and closing costs on your new home, which is a big part of why it lets you move without draining savings.

Let's look at your equity

The fastest way to know how much you can put toward your next Michigan home is to run the numbers together. Take the free qualifier quiz or call me at (734) 891-4348 and we'll pull a realistic equity estimate in one conversation.

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David Keblaitis, NMLS #167980, powered by Cornerstone First Mortgage, Inc. (NMLS #173855). Licensed by the Michigan Department of Insurance and Financial Services. Equal Housing Lender. Bridge loans and Buy Before You Sell programs are offered to qualified borrowers only; terms, timelines, and availability vary by borrower and are subject to change without notice. This article is educational, is not a commitment to lend, and is not financial advice.