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Bridge Loans in Millbrae
Millbrae's competitive real estate market often requires quick action when properties become available. Bridge loans provide the short-term capital needed to purchase a new home before selling your current property, eliminating the pressure of contingent offers.
This financing tool proves particularly valuable in San Mateo County's fast-paced market. Sellers frequently prefer non-contingent offers, and bridge loans give buyers the advantage of competing with all-cash purchasers while their existing home goes through the sales process.
Bridge loan approval focuses on equity in your existing property rather than traditional income documentation. Most lenders require at least 20-30% equity in the property you're selling, plus demonstrated ability to carry both mortgages temporarily.
Credit requirements remain flexible compared to conventional financing. While you'll need sufficient equity and proof of your existing home's listing or pending sale, the qualification process moves faster than traditional mortgage applications.
These loans typically last 6-12 months and carry higher interest rates than permanent financing. Rates vary by borrower profile and market conditions, with costs reflecting the short-term nature and elevated risk of bridge financing.
Bridge loans come from specialized lenders and some portfolio lenders rather than traditional banks. The private lending market offers more flexible underwriting, focusing on your property's value and equity position instead of strict debt-to-income ratios.
Working with a broker provides access to multiple bridge loan sources simultaneously. Different lenders offer varying terms, repayment structures, and fee arrangements, making comparison shopping essential for securing favorable terms.
Some bridge loans require interest-only payments during the term, while others defer all payments until your existing property sells. Understanding these structural differences helps you choose the right financing match for your timeline and budget.
The most successful bridge loan transactions happen when borrowers list their existing property before or immediately after securing the loan. Lenders view active marketing of your current home as evidence of your commitment to repayment within the loan term.
Calculate total carrying costs carefully before proceeding. You'll temporarily manage two mortgage payments plus bridge loan interest, property taxes, and insurance on both properties. Conservative budgeting prevents financial strain during the transition period.
Exit strategy matters as much as loan approval. Have backup plans if your property takes longer to sell than anticipated, whether that means rental income from the old property or refinancing options for the new one.
Bridge loans differ from hard money loans in purpose and structure. While hard money typically finances fix-and-flip projects or properties needing renovation, bridge loans serve homeowners in transition between primary residences with shorter approval timelines.
Home equity lines of credit offer an alternative for some buyers, though they require maintained payments on your existing mortgage. Bridge loans consolidate your borrowing and often provide higher loan amounts based on your new property's purchase price.
Interest-only loans serve long-term financing needs, while bridge loans explicitly address short-term gaps. The higher costs of bridge financing only make sense when you have a clear, time-bound need to own two properties simultaneously.
Millbrae's proximity to San Francisco International Airport makes it attractive to professionals who need quick transitions for job relocations. Bridge loans accommodate these accelerated timelines when coordinating property purchases across different markets.
San Mateo County's strong property values support bridge loan underwriting. The relative stability of Millbrae real estate gives lenders confidence in your collateral, potentially improving terms compared to more volatile markets.
Local market velocity affects bridge loan strategy. Understanding typical days-on-market for properties similar to yours helps determine appropriate loan terms and whether bridge financing aligns with realistic selling timelines in your neighborhood.
Loan amounts typically reach 80% of your existing property's value combined with the new purchase price, minus existing mortgage balances. The exact amount depends on your equity position and the lender's specific criteria.
Most lenders offer extension options for additional fees. You can also refinance into permanent financing on the new property or explore rental income options for your original home to maintain payments.
Interest on bridge loans may be tax deductible when secured by your property, but consult a tax professional for your specific situation. Deductibility depends on loan structure and how you use the funds.
Approval often happens within 5-10 business days for straightforward transactions. The simplified underwriting process moves faster than conventional mortgages since it focuses primarily on property equity and value.
Payment structures vary by lender. Some require monthly interest payments, while others defer all payments until your existing property sells or the loan matures, though deferred payments increase total costs.
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.