What Is a Knock Bridge Loan?

A Knock bridge loan gives you immediate cash to cover the down payment, closing costs, and moving expenses on a new home before your current house sells. It functions as a short‑term, interest‑only loan that's typically funded within a few days of approval.

Loan amounts usually reflect a percentage of the equity in your existing home, and the repayment period often ranges from 6 to 12 months, with the balance due when your home closes or you refinance. Rates, fees, and any pre‑payment penalties can differ by lender and state, so read the loan agreement carefully and confirm you can meet the payments if the sale takes longer than expected.

Knock lets you close on a new home while your current house is still on the market by providing a short‑term 'bridge' loan that covers the purchase price minus any equity you plan to use.

1. Get pre‑approved. Submit the required documents (pay stubs, tax returns, mortgage statement) through the Knock app. The lender will calculate the maximum loan amount based on your equity and credit profile.
2. Make an offer on the replacement home. Once pre‑approval is confirmed, use the loan funds to cover the down payment and closing costs. The loan is typically disbursed directly to the seller's escrow account.
3. List your current home. After the purchase closes, Knock lists your property on the MLS or a partnered real‑estate platform. You remain responsible for its upkeep and any mortgage payments until it sells.
4. Repay the bridge loan. When your home sells, the proceeds first pay off the Knock loan, including any accrued interest or fees. Any remaining balance goes to you. If the sale price is lower than expected, you may need to cover the shortfall out of pocket.
5. Close the loop. Verify that the loan is fully satisfied and obtain a payoff statement. Keep the statement for your records and for any future refinancing considerations.

Safety tip: Confirm the loan's interest rate, repayment timeline, and any pre‑payment penalties in your agreement, and have a backup plan in case the sale of your home takes longer than anticipated.

Knock's bridge loan differs from most traditional bridge loans and HELOCs in funding speed, qualification criteria, and repayment structure. It is designed for homebuyers who need cash to close on a new purchase before their current home sells, charges interest‑only for the short term, and usually requires no separate appraisal.

Traditional bridge loans often need a full appraisal, charge higher origination fees, and may require monthly principal‑plus‑interest payments; HELOCs operate as a revolving line of credit, usually have a draw period, and can carry variable rates that rise over time. Both typically demand higher equity or stronger credit and may take longer to close, which can delay a home purchase if the sale of the existing property stalls.

Before deciding, compare the APR, any upfront fees, pre‑payment penalties, and the lender's policy on funding timelines for each option. Verify these details in the loan agreement to avoid unexpected costs.

To estimate the real cost of a Knock bridge loan, combine the interest charged on the advance, the loan‑origination fee, any closing‑cost items, and possible early‑repayment or prepayment fees; each of these components can vary by loan size, credit profile, and state regulations.

• Interest rate - Applied to the outstanding balance daily; the effective cost depends on the rate tier and how long the loan remains open. Verify the APR disclosed in your loan agreement.
• Origination fee - Typically a percentage of the funded amount, deducted up front or added to the balance. Check the exact fee schedule before signing.
• Closing costs - May include title searches, recording fees, and attorney fees; some lenders bundle these into the loan amount. Ask for a detailed closing‑cost estimate.
• Prepayment or early‑repayment fee - Some bridge loans charge a penalty if you pay off the loan before a specified period. Confirm whether this applies and how it's calculated.
• Late‑payment charges - If a payment is missed or delayed, a flat fee or percentage may be added. Review the penalty terms in the contract.
• Optional services - Lenders sometimes offer rate‑lock or insurance products for an extra fee; include these only if you choose them.

Before finalizing, request a written 'Cost Breakdown' from Knock that lists each of the items above, then compare the total to the amount you expect to borrow. This will give you a clear picture of the net cost you'll actually pay.

To know if you qualify for a Knock bridge loan, match your profile against the program's core requirements.

• Minimum credit score typically ranges from 660 to 700, depending on the lender and state regulations.
• 10‑20 % equity in your current home is usually required, measured by the difference between market value and outstanding mortgage.
• Stable income that supports a debt‑to‑income ratio of 40 % or lower, as calculated from gross monthly earnings.
• A confirmed purchase contract for the new property and a pending sale or clear plan to sell the existing home within the loan term (often 6‑12 months).
• The loan amount generally cannot exceed a percentage of the available equity, often capped around 75 % of the equity value.

Verify each criterion in your Knock cardholder agreement or lender disclosure before proceeding.

Knock's application asks for a short set of documents that verify who you are, how much you earn, and the two properties involved.

Commonly requested items

• Government‑issued photo ID (driver's license or passport)
• Recent pay stubs or profit‑and‑loss statements if you are self‑employed
• Most recent federal tax return (usually the last‑year filing)
• Bank statements covering the prior 30‑60 days
• Current mortgage statement for the home you plan to sell
• Fully executed purchase contract for the home you intend to buy
• Homeowners‑insurance declarations page, if already in force
• Documentation of any existing liens, judgments, or other encumbrances (if applicable)
• Proof of the source of your down‑payment (e.g., bank transfer receipt, savings statement)

Before you upload anything, log into the Knock portal or contact their support to confirm the exact list for your situation. Keep each file clear, legible, and in a common digital format (PDF or JPEG) to avoid delays.

Tip: having digital copies ready and organized by category speeds up the review process.

The typical Knock bridge‑loan process moves from application to payoff in a few clear phases; most borrowers see funding within a week and must close the loan after selling the home, usually within 12 months.

1. Gather required documents - Income verification, credit report, property details, and purchase contract. Having these ready can shorten review time.
2. Submit the online application - Enter personal and loan information, then upload the documents. Submission is instant, but the next step depends on underwriting workload.
3. Underwriting review - Knock's team usually completes an initial decision in 1 - 2 business days. Complex cases or missing data can extend this period.
4. Conditional approval & loan offer - You receive the approved amount, interest rate, and repayment terms. Review the offer carefully; ask for clarification on any deadline.
5. Funding (draw) of the bridge loan - Once you accept the offer and sign the agreement, funds are typically wired within the same business day or, at most, 48 hours.
6. Monthly interest payments - During the bridge period you make interest‑only payments on the outstanding balance. The payment schedule is outlined in the agreement.
7. Sale of the original home - Most Knock loans require the home to sell before a preset deadline, often 12 months from funding. The exact window can vary by loan product and state law.
8. Payoff and loan close - After the sale closes, the proceeds are used to repay the bridge loan, including any accrued interest and fees. Any remaining balance is your responsibility.

What to double‑check: the exact funding‑to‑sale deadline in your loan agreement, any required pre‑payment notifications, and the process for handling a delayed sale. If any step seems unclear, contact your Knock representative before moving forward.

Interest rate and fees are often presented as 'competitive,' but the actual cost can rise if the rate is variable or if hidden charges apply after the initial draw. Most Knock lenders assume the home will sell within the bridge period; they rarely stress that a delayed closing can trigger costly extensions, higher interest accrual, or even a default that jeopardizes the equity used as collateral.

Because the loan is secured by your current property, a missed payment may lead to foreclosure, which can also lower your credit score and affect future mortgage qualification. Finally, pre‑payment penalties or restrictions on early payoff are not always highlighted, so paying off the bridge early could still incur unexpected costs.

Before signing, request a full cost breakdown that separates the interest rate, all fees (origination, appraisal, closing), and any extension costs. Verify whether the rate is fixed or variable and ask how often it can change. Ask for the lender's default policy and whether they require a personal guarantee beyond the home. Compare these terms with traditional bridge loans or HELOCs, and consider a quick review by a real‑estate attorney or trusted financial advisor to confirm you understand every obligation.

Here's a concise walk‑through of a typical Knock bridge‑loan journey, from the buyer's accepted offer on a new home to the day they move in after selling their current house.

First, the buyer signs a purchase agreement and then submits a Knock application with required documents (paystubs, tax returns, and the sale contract for the existing home). Within a few business days, Knock's underwriters usually issue a conditional approval that specifies the loan amount, interest rate, and repayment trigger - typically the sale of the buyer's current property. At closing, Knock funds the bridge loan, allowing the buyer to close on the new home while the old one remains on the market; the loan is structured to be repaid in full once the original house sells, often with a single payoff transaction.

After the old home sells, Knock draws the repayment from the proceeds, closes out the bridge loan, and the buyer receives the keys to the new residence. Before moving, it's wise to confirm the exact payoff amount, any accrued interest, and that no prepayment penalties apply, then keep a copy of the final loan statement for records.

• review the loan agreement carefully and consider consulting a financial adviser to ensure the bridge loan fits your specific situation.

Decide if a Knock bridge loan works for you by walking through this 10‑point checklist. Remember that rates, fees, and eligibility can differ between lenders and states, so verify each item with the specific loan offer.

• Loan purpose aligns with your timeline - you need funds to purchase a new home before your current one sells.
• Interest rate and fee structure are clear - ask for the annual percentage rate, origination fee, and any ongoing service charges; compare them to other bridge options.
• Repayment plan fits your exit strategy - confirm whether repayment is due at closing of your sale, via monthly installments, or both.
• Term length matches your expected sell‑through period - most bridge loans run 6‑12 months, but some may be shorter or longer.
• Eligibility criteria are met - check credit score minimums, equity requirements, and income documentation that Knock requires.
• Required documentation is ready - typical items include recent pay stubs, tax returns, mortgage statements, and proof of home equity.
• Closing timeline is realistic - ask how many business days Knock needs to fund the loan and whether any conditions could delay closing.
• Risk disclosures are understood - know what happens if your home sells for less than expected or if the sale falls through.
• Prepayment penalties or early‑exit fees exist - some lenders charge a fee for paying off the loan before the agreed term; clarify the amount or percentage.
• Lender reputation and support are satisfactory - look for reviews, BBB ratings, or referrals, and test the responsiveness of the borrower services team.

If any answer raises uncertainty, request written clarification from Knock and consider consulting a financial advisor before proceeding.