Methodology, assumptions and sources
How the BRIDGE calculator works
Author and review. Built by John King, REALTOR®, Berkshire Hathaway HomeServices RW Towne Realty, Virginia license 0225211050. Calculations verified against independently computed amortization schedules. Content reviewed October 19, 2026.
Payments. Standard monthly amortization: M = P × r ÷ [1 − (1 + r)−n], where P is principal, r the monthly rate and n the remaining payments; at 0% the payment is P ÷ n. The assumed loan keeps its remaining term; it is never reset to 30 years. A verified P&I override, if entered, replaces the calculated assumption payment.
Cash to close. Assumption: equity gap (price minus balance) + assumption transaction costs + 0.5% VA assumption fee (paid in cash; waived if exempt) − seller credits − any second-lien principal + second-lien fees. New mortgage: down payment + closing costs + discount points + any funding fee paid in cash − seller credits. A VA funding fee financed into the new loan raises the loan balance instead. Nothing is counted twice: the down payment and the equity gap appear only in cash to close, principal repayment appears only in the loan balance.
Ownership horizon. Both options are simulated month by month. Each starts with the same available cash; whatever is not used at closing is the starting investment balance. Each month the model pays every loan in that option, and the difference between that option’s payment and the higher of the two options’ payments is added to the investment account, which grows at the entered return (reduced by the optional tax rate). Loans paid off before the horizon stop drawing payments, and those freed-up dollars are saved too. Private mortgage insurance on a conventional loan under 20% down is 0.5% of the loan per year until the balance falls below 80% of the price. Home value grows at the entered rate and selling costs apply identically to both options. Financial position = investment balance + home value after selling costs − all remaining loan balances.
Break-even. The first month the sign of the difference between the two positions flips. If it never flips inside the horizon, the page says so instead of inventing a date.
Interpretation. The message is chosen only from the numbers: cash shortfall, reserve shortfall, an advantage larger than the greater of $5,000 or 1% of the price for either option, or a result inside that band (“similar”). It never recommends a loan product or predicts approval.
VA figures used. Assumption funding fee 0.5% of the balance, paid at closing, with the same exemptions as the standard funding fee; new VA purchase funding fee 2.15% first use or 3.3% subsequent use under 5% down, 1.5% at 5%–9.99% down, 1.25% at 10% or more, financeable into a purchase loan: VA funding fee and loan closing costs (VA.gov). Assumption approval, release of liability and substitution of entitlement: 38 U.S.C. § 3714 and 38 CFR § 36.4303(l); assumption processing fee cap, the 0.5% assumption fee and its exemptions: 38 CFR § 36.4313(d)(8), (e)(2), (e)(5); VA home loan programs (VA.gov) and the VA Lenders Handbook, Pamphlet 26-7, for secondary financing. Regulations change; these were checked October 19, 2026. Benchmark rate, when displayed: Freddie Mac Primary Mortgage Market Survey 30-year fixed average via FRED series MORTGAGE30US, a national average for borrowers with strong credit, not a quote.
What the calculator cannot predict. Whether the loan holder approves the buyer; whether any lender will offer secondary financing; the home’s appraised value or its future price; future mortgage rates, investment returns or tax law; the actual processing time of an assumption; the servicer’s exact fees; or the seller’s remaining entitlement after a non-veteran assumption. Every one of those can change the answer, and every one must be verified with the people who control it.
Worked example (hypothetical, independently verified). Scenario 1 above: $600,000 price, $500,000 balance at 2.75% with 25 years left, 7.0% new VA loan at 0% down with the 2.15% funding fee financed, $150,000 cash, 7 years. Assumption: equity gap $100,000 + $3,500 costs + $2,500 fee = $106,000 to close; P&I $2,306.55; interest over 7 years $86,368. New loan: $612,900 balance; $9,000 to close; P&I $4,077.64; interest over 7 years $288,264. The assumption’s projected position after 7 years is about $202,900 higher, with no crossover inside the horizon. Scenario 2 ($800,000 / $350,000) needs about $455,250 to close against $300,000 available, so it is flagged as not practical. Scenario 3 ($700,000 / $450,000 at 3.25%, $275,000 cash, $75,000 reserve) can close with about $255,750 but leaves roughly $19,250, below the reserve target, so the liquidity warning fires even though the payment is $2,564 a month lower.
What this is not. Not a loan approval, Loan Estimate, appraisal, rate quote, financial, tax or legal advice, or a prediction of rates, prices or investment returns. Results depend entirely on the numbers entered. Verify everything with the loan servicer and your lender before relying on it.
