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Bridge Loans in Sonoma
Sonoma's high-value real estate and competitive market create situations where buyers need to move fast before their current home sells. Bridge loans let you make non-contingent offers that win in multiple-bid scenarios common across Wine Country.
These loans typically run 6-12 months and use your existing property as collateral. Most Sonoma buyers use them when upgrading from one estate to another or transitioning between vineyard properties.
Interest rates run 8-12% annually, significantly higher than conventional mortgages. But the speed and flexibility often justify the cost when timing matters in Sonoma's tight inventory environment.
You need significant equity in your current property, typically 30-40% minimum. Lenders want to see that combined loan-to-value across both properties stays under 80%.
Credit requirements are more flexible than conventional loans, usually 620 minimum. But you must prove ability to carry both mortgages simultaneously until your current home sells.
Most lenders require the property you're selling to be actively listed or ready to list. They want an exit strategy, not indefinite bridge financing.
Bridge loans come from private lenders and specialized finance companies, not traditional banks. Processing takes 1-2 weeks versus 30-45 days for conventional mortgages.
Each lender structures terms differently. Some require interest-only payments during the bridge period. Others defer all payments until your current home sells.
Expect origination fees of 1.5-3% plus standard closing costs. Some lenders charge prepayment penalties if you pay off early, while others don't.
Most Sonoma buyers overestimate how quickly their current home will sell. I recommend conservative exit timelines, especially for properties over $2 million where buyer pools narrow.
Bridge loans work best when you're certain about your sale. If your home needs significant prep work or you're testing an aggressive list price, you're adding risk to expensive short-term debt.
The math gets tight on lower-priced properties. If you're bridging a $700k home to buy a $900k property, the carrying costs eat up equity fast. This tool makes more sense at higher price points.
Hard money loans offer similar speed but typically require less equity and allow non-owner occupied properties. Bridge loans specifically target owner-occupant transitions.
Home equity lines provide cheaper capital but take longer to establish and may not give you enough for a full down payment. Bridge loans are purpose-built for property transitions.
Some borrowers use interest-only conventional loans with large down payments instead. That works if you can liquidate other assets, but requires selling investments rather than waiting for your home.
Sonoma's seasonal market affects bridge loan timing. Homes listed in spring typically sell faster than winter listings, which impacts your carrying cost risk.
Properties with vineyard components or specialized agricultural features can take longer to sell. Lenders account for this when evaluating loan terms and may require shorter bridge periods.
High property values in Sonoma mean you're carrying substantial monthly interest costs. A $1.5 million bridge loan at 10% costs $12,500 monthly in interest alone.
Most lenders offer extensions at higher rates, typically adding 2-3% to your interest rate. You'll pay extension fees of 0.5-1% of the loan amount.
Some lenders allow this, but most bridge loans are designed for primary residence transitions. Investment properties typically require hard money loans instead.
Lenders typically require 30-40% equity minimum. Combined loan-to-value across both properties must stay under 75-80% in most cases.
Yes, lenders appraise both your current property and the one you're buying. Expect 1-2 weeks for appraisals on higher-value Wine Country properties.
Most lenders require an active listing or proof the home is market-ready. They want to see a clear exit strategy before approving financing.
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.