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LA's fast-moving market punishes contingent offers. Bridge loans let you close on a new property while your current home is still listed.
These short-term loans work best when you need 6-12 months to sell. Expect to pay 7-10% interest, but you gain negotiating power by writing non-contingent offers.
Lenders approve based on equity in your current property, typically requiring 30-40% combined equity. Credit matters less than assets and exit strategy.
You'll need proof your existing home can sell within the loan term. Most lenders want a broker price opinion or recent appraisal showing realistic list price.
Bridge loans come from private lenders and specialized non-QM shops, not your typical bank. Each lender structures deals differently on loan-to-value and repayment terms.
Some lenders fund based on future sale proceeds only. Others let you service both mortgages during the bridge period if income supports it.
I see bridge loans work best in west LA neighborhoods where inventory moves in 30-60 days. They're riskier in areas where homes sit for months.
Most borrowers underestimate closing costs and carrying expenses. Budget for two mortgages, bridge loan interest, and selling costs before you commit.
Hard money loans fund faster but cost more — expect 10-14% rates. Bridge loans offer slightly better terms since you have a clear exit through your home sale.
If you can wait, a home equity line on your current property costs less. But HELOCs don't help if you need to write a non-contingent offer next week.
LA's market timing matters enormously. Spring selling season gives you the best shot at moving your existing property quickly.
Downtown and westside condos can take longer to sell than single-family homes. Your bridge loan term needs to account for realistic days on market in your specific neighborhood.
Most lenders offer 6-month extensions for a fee. If you can't extend, you'll need to refinance or bring cash to pay off the bridge loan.
Yes, a ratified purchase contract strengthens your application. Lenders view pending sales as lower risk than properties just hitting the market.
Depends on the lender structure. Some roll all payments into the bridge loan payoff. Others require monthly interest payments during the term.
Fastest closings run 7-10 days with all documentation ready. Most deals close in 2-3 weeks, still faster than conventional financing.
Most lenders cap at 80% LTV on your combined property values. The actual limit depends on your equity and the lender's portfolio requirements.
Bridge Loans in Los Angeles