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Bridge Loans in Los Gatos
Los Gatos buyers face a common challenge: finding their next home before selling their current property. Bridge loans solve this timing problem by providing short-term financing to purchase a new home while your existing property remains on the market.
Santa Clara County's competitive real estate environment makes speed essential. Bridge financing lets you make non-contingent offers, significantly strengthening your position against all-cash buyers in this sought-after market.
These short-term loans typically last 6-12 months, giving you breathing room to sell your current property without the pressure of rushed decisions or temporary housing arrangements.
Bridge loan approval focuses heavily on equity in your current property. Most lenders require at least 20-25% equity, which serves as collateral alongside the new purchase. Your total loan-to-value across both properties typically cannot exceed 80%.
Credit requirements are generally more flexible than traditional mortgages, with many lenders accepting scores in the mid-600s. Income verification matters less than equity position, making these loans accessible even for borrowers with complex financial situations.
The application process moves quickly—often closing within 2-3 weeks. Lenders prioritize your property equity and exit strategy over extensive documentation, though you'll still need appraisals on both properties.
Bridge loans fall into the non-QM category, meaning they're portfolio products held by private lenders rather than sold to government agencies. In Los Gatos, you'll find options from local California-based lenders and national private money sources.
Rates vary by borrower profile and market conditions, but expect pricing 2-4% above conventional mortgage rates. Many lenders charge interest-only payments during the bridge period, minimizing your monthly outlay while carrying two properties.
Working with a broker provides access to multiple bridge lenders simultaneously. This matters because each lender has different appetite for property types, loan amounts, and borrower situations—finding the right match saves both time and money.
The biggest mistake Los Gatos borrowers make is waiting until they've found a new home before exploring bridge financing. Pre-qualifying for a bridge loan puts you in a position to act immediately when the right property appears.
Your exit strategy matters enormously to lenders. Having your existing home already listed, priced competitively, and showing strong buyer interest significantly improves both approval odds and pricing. Some lenders won't proceed without an active listing.
Consider bridge loans as part of a two-step strategy. Many borrowers use bridge financing for the purchase, then refinance into a traditional mortgage once their original home sells, capturing lower long-term rates.
Hard money loans and bridge loans often get confused, but they serve different purposes. Hard money typically finances fix-and-flip projects with higher rates and shorter terms, while bridge loans specifically address the buy-before-sell timing gap.
Home equity lines of credit offer an alternative for some borrowers, but HELOC approval takes longer and may not provide enough capital for a full Los Gatos down payment. Bridge loans deliver larger amounts faster, though at higher cost.
For investors, construction loans or traditional investor financing might prove more suitable for ground-up projects or extensive renovations. Bridge loans work best for turnkey properties when timing creates the primary challenge.
Los Gatos properties command premium values, which means bridge loans here typically involve larger amounts than many California markets. Lenders comfortable with jumbo-sized bridge financing are essential—not all private lenders operate at this scale.
The seasonal nature of Silicon Valley's real estate market affects bridge loan strategy. Spring and early summer see the strongest buyer activity, making these ideal times to have your existing property on the market during your bridge period.
Property types matter in Los Gatos. Lenders view single-family homes in established neighborhoods more favorably than condos or properties requiring significant work. The town's mix of estate properties and smaller homes creates varying approval scenarios.
Expect rates 2-4% above conventional mortgages plus origination fees of 1-2%. Total costs depend on your equity position and how quickly you sell. Rates vary by borrower profile and market conditions.
Some lenders require an active listing before approval, while others proceed based on equity and appraisal. Having your home listed and priced competitively improves both approval odds and loan terms significantly.
Most bridge loans include extension options for an additional fee. Alternatively, you can refinance the bridge loan into a traditional mortgage and carry both properties until your original home sells.
Yes, lenders appraise both your existing property and the new purchase. This process typically adds one week to closing timelines but ensures accurate equity calculations for loan approval.
Bridge loans work for both primary residences and investment properties. Investment property bridge loans may have slightly different terms, but the fundamental structure remains the same for timing-based purchases.
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.