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Bridge Loans in Folsom
Folsom's competitive real estate market often requires buyers to act quickly when the right property appears. Bridge loans provide the short-term capital needed to purchase a new home before selling your current one.
This financing solution works well in Sacramento County's active market, where timing can make the difference between securing your ideal property or losing it to another buyer. Bridge loans typically last 6-12 months, giving you breathing room to sell strategically rather than under pressure.
Bridge loan approval focuses on equity in your current property rather than traditional income documentation. Most lenders require at least 20-30% equity in the home you're selling and strong credit scores above 660.
You'll need a clear exit strategy showing how you'll repay the bridge loan, typically through the sale of your existing property. Lenders evaluate the combined loan-to-value ratio across both properties to determine maximum loan amounts.
Rates vary by borrower profile and market conditions. Bridge loans carry higher interest rates than conventional mortgages due to their short-term nature and increased risk, typically ranging 2-4% above standard mortgage rates.
Bridge loans come from specialized lenders and private money sources rather than traditional banks. Many conventional mortgage lenders in Sacramento County don't offer bridge financing, making it essential to work with brokers who have access to these niche programs.
Application timelines run faster than standard mortgages, often closing within 2-4 weeks. This speed allows Folsom buyers to make non-contingent offers that stand out in competitive situations, though faster approvals require thorough documentation preparation upfront.
Smart bridge loan use involves calculating total carrying costs across both properties. You'll pay interest on the bridge loan plus existing mortgage payments until your original home sells, creating a temporary double payment situation that requires cash reserves.
Working with experienced brokers helps structure bridge loans that minimize costs and maximize flexibility. Some programs offer interest-only payments during the bridge period, while others capitalize interest into the loan balance to reduce monthly outlays.
The key is matching loan terms to your specific sale timeline. If your Folsom home will likely sell quickly, a shorter bridge term with lower fees makes sense. Properties needing more marketing time benefit from longer bridge periods despite higher costs.
Bridge loans differ from hard money loans in their intended use and typical terms. While hard money focuses on property value for fix-and-flip investors, bridge loans specifically solve the timing gap between buying and selling primary residences.
Home equity lines of credit offer an alternative for buyers with sufficient equity, typically at lower rates. However, HELOCs require monthly payments and may not provide enough capital for down payments on higher-priced Folsom properties.
Construction loans serve buyers building new homes who need to sell existing properties before construction completes. Bridge loans handle completed property purchases where immediate occupancy is the goal.
Folsom's proximity to major Sacramento County employment centers creates steady housing demand that supports bridge loan strategies. Properties here typically sell within reasonable timeframes, reducing the risk of extended bridge loan periods.
The city's mix of established neighborhoods and newer developments means bridge loan applicants range from move-up buyers in older areas to those transitioning between modern communities. Each scenario requires different equity calculations and sale timeline projections.
Sacramento County recording fees and transfer taxes factor into bridge loan costs. Budget for these expenses on both the purchase and eventual sale transactions when calculating your total financing needs.
Most bridge loans close within 2-4 weeks when documentation is prepared in advance. This speed allows you to make competitive offers without sale contingencies in Folsom's active market.
Bridge loans typically include extension options, though they come with additional fees. Your lender may also consider refinancing into a longer-term solution if your property needs more marketing time.
Bridge loans work for both primary residences and investment properties. Investor bridge loans may have different terms and rates compared to owner-occupied bridge financing.
Most bridge lenders require 20-30% equity minimum. The exact amount depends on combined loan-to-value calculations across both your existing property and the home you're purchasing.
Yes, bridge loans typically run 2-4% higher than conventional mortgage rates due to their short-term nature and increased complexity. Rates vary by borrower profile and market conditions.
Mortgage financing for independent contractors and freelancers who earn 1099 income instead of traditional W-2 wages.
Mortgage programs that allow borrowers to qualify based on liquid assets rather than traditional employment income.
Non-QM loans that use 12 to 24 months of bank statements to verify income for self-employed borrowers.
Debt Service Coverage Ratio loans that qualify investors based on a rental property's income rather than personal income.
Mortgage programs designed for non-US citizens and non-permanent residents who want to purchase property in the United States.
Asset-based short-term loans primarily used by real estate investors for property acquisition and renovation projects.
Mortgages that allow borrowers to pay only the interest for an initial period, resulting in lower monthly payments upfront.
Financing solutions tailored for real estate investors purchasing rental properties, fix-and-flip projects, or investment portfolios.
Home loans for borrowers who have an Individual Taxpayer Identification Number instead of a Social Security number.
Adjustable rate mortgages held in a lender's portfolio rather than sold on the secondary market, offering more flexible terms.
Non-QM mortgages that use a CPA-prepared profit and loss statement to verify income for self-employed borrowers.
Home loans with interest rates that adjust periodically based on market conditions after an initial fixed-rate period.
Specialized mortgage programs designed to support homeownership in underserved communities with flexible qualification criteria.
Mortgages that meet the guidelines and loan limits set by Fannie Mae and Freddie Mac for secondary market purchase.
Financing for building a new home or making major renovations, typically converting to a permanent mortgage upon completion.
Traditional mortgage financing not backed by a government agency, offering flexible terms and competitive rates for qualified borrowers.
Innovative loan products that leverage projected home equity growth to provide favorable financing terms.
Government-insured mortgages from the Federal Housing Administration with low down payments and flexible credit requirements.
A revolving line of credit secured by your home equity that allows you to borrow funds as needed during a draw period.
A fixed-rate second mortgage that provides a lump sum of cash by borrowing against the equity built in your home.
Mortgages that exceed the conforming loan limits set by the FHFA, designed for financing high-value luxury properties.
Loans for homeowners aged 62 and older that convert home equity into cash without requiring monthly mortgage payments.
Government-backed zero down payment mortgages for eligible rural and suburban homebuyers who meet income limits.
Government-guaranteed mortgages for eligible veterans, active-duty service members, and surviving spouses with zero down payment.