Buying a new home before selling your current one can feel risky, especially in California’s competitive housing market. Many homeowners worry about timing, cash flow, and carrying two mortgages at once. A bridge loan can help solve this problem. This guide from Golden Gate Lending Group helps you learn how bridge loans work and how California homeowners can use them to buy first and sell later with confidence.
Bridge Loans at a Glance
A bridge loan is a short-term loan that helps you access the equity in your current home before it sells. The loan “bridges” the gap between buying a new home and selling your existing one. Bridge loans are usually used for a few months up to one year.
These loans are commonly used to fund the purchase of a new home. Once your current home sells, you use the sale proceeds to pay off the bridge loan.
Why Bridge Loans Are Popular in California
California homes tend to sell for high prices and move quickly. Sellers prefer buyers who can make strong, non-contingent offers. A bridge loan allows you to buy without waiting to sell first, which can make your offer more attractive.
Bridge loans also help homeowners avoid temporary housing, rushed sales, or moving twice. This is especially helpful in areas with limited inventory and high demand.
How the Process Works
Assess your equity
Lenders look at how much equity you have in your current home. Most bridge loans allow you to borrow a portion of that equity.
Get pre-approved
Work with a lender like Golden Gate Lending Group who offers bridge loans in California. Pre-approval helps you understand your budget and strengthens your offer.
Buy your new home
Use the bridge loan to cover the down payment or purchase price. Because you are not relying on your home sale, your offer can be non-contingent.
List and sell your current home
After you move, you sell your existing property. This leads to a cleaner showing process and better sale terms.
Repay the bridge loan
When your home sells, the bridge loan is paid off from the sale proceeds.
The Main Benefits Bridge Loans Offer
Bridge loans offer speed and flexibility. They reduce stress by allowing you to focus on buying the right home, not racing the clock. They also give you more control over when and how you sell.
What to Consider Before Getting a Bridge Loan
Bridge loans usually have higher interest rates and fees than traditional mortgages. You may also need to qualify for payments on both homes for a short time. A clear exit plan, usually the sale of your current home, is essential.
For California homeowners, a bridge loan can be a powerful tool to buy before selling. When used wisely and with the right professional guidance, it provides a smooth and strategic path to your next home.
