You found the right next home, but your current place is not on the market yet. If you want to move without disrupting your routine or the school calendar, timing can feel tricky. A bridge loan may give you the flexibility to buy first, then sell, without juggling a rushed move. In this guide, you will learn how bridge loans work for Orinda move-up buyers, what they cost, how to qualify, local timing tips, and practical alternatives. Let’s dive in.
What is a bridge loan?
A bridge loan is short-term financing that helps you purchase a new home before selling your current one. You repay it when your existing home sells or by refinancing into a longer-term loan.
Two common product types are closed and open bridge loans. A closed bridge links repayment to a known sale milestone or firm end date. An open bridge does not tie repayment to a sale date, so terms may be stricter.
A bridge loan is different from a HELOC or a home equity loan. HELOCs and home equity loans tap your existing equity and tend to run longer, while bridge loans are designed specifically to cover a short timing gap of months, not years.
How a bridge loan works
Bridge financing supports a buy-before-you-sell plan. You close on the new home with a primary mortgage plus bridge funds, then list and sell your current home. Once it sells, you pay off the bridge loan.
Typical timeline
- Weeks to months before you offer: estimate your current home’s equity and get pre-approved for your next mortgage with a lender that supports bridge solutions.
- Before you write: obtain a bridge term sheet or pre-qualification so your offer shows funds are ready.
- At purchase closing: use bridge funds to cover the down payment or to carry both homes during the transition.
- After closing: list and market your current home as soon as possible.
- At sale: repay the bridge loan in full or refinance into permanent financing as needed.
Closed vs open structures
- Closed bridge: repayment links to a known sale date or a firm deadline, which can improve pricing and predictability.
- Open bridge: more flexible timing but often higher cost and tighter terms because the lender takes on more risk.
Do you qualify?
Bridge lenders focus on your equity, credit, income, and a clear plan to sell. Expect a detailed review of your current home and your new purchase.
What lenders review
- Equity in your current property, which serves as primary collateral.
- Credit score and history.
- Debt-to-income ratio that includes your existing mortgage, your new mortgage, and the bridge loan. Some lenders model DTI assuming the sale occurs, while others use present obligations.
- Cash reserves to cover several months of payments on both homes.
- Appraisal and condition of your current home to gauge marketability and value.
- Your sale plan, including a listing agreement or a detailed market analysis from your agent.
Documents to prepare
- Recent pay stubs, W-2s or tax returns, and bank statements.
- Current mortgage statements.
- Purchase contract for the new home.
- Listing agreement or a broker’s market analysis for your current home, if available.
Lenders may be banks, credit unions, mortgage lenders, or specialized bridge providers. Underwriting styles vary. Some calculate a combined loan-to-value across both properties, and others focus on the existing home’s equity. That can affect your maximum loan size and pricing.
Costs and terms
Bridge loans are short term and usually cost more than long-term mortgages. Many require interest-only payments during the term.
- Typical duration runs about 6 to 12 months, with some products extending longer at higher cost or with stronger collateral.
- Rates are usually higher than standard mortgages because the loan is short term and higher risk.
- Common fees include origination, appraisal or inspection, title and escrow, and sometimes payoff or risk fees.
- Lenders limit advances to a portion of your available equity and often require you to keep meaningful equity as a buffer.
- Repayment is expected at sale. Confirm whether interest accrues into the balance and whether you can prepay without penalty.
Risks and safeguards
Carrying two homes for longer than expected is the main risk. Pricing and timing missteps can increase costs. You can reduce risk with a conservative plan.
- Build conservative sale price assumptions and add contingency funds to cover several months of payments on both properties.
- Get a realistic net proceeds estimate that includes commission, escrow fees, and repair costs before sizing the bridge loan.
- Favor loan terms that allow early payoff without penalty and provide a clear payoff process.
- Move quickly on market prep and pricing strategy to shorten time on market.
- If possible, negotiate a rent-back to buy more time for moving and sale coordination.
Orinda timing and tips
The Lamorinda market often has limited inventory for well-presented family homes, so non-contingent offers tend to be more competitive. Bridge financing can make your offer stronger when a sale contingency would weaken your position.
Many move-up families aim to close in late spring or summer to align with the school year. This can create a seasonal surge in both inventory and competition. If you plan a summer purchase, be ready to move quickly and list your current home without delay.
Hill homes in Orinda may involve unique factors such as hillside stability, retaining walls, septic versus sewer, and steep driveways that affect access. These details can impact buyer confidence, appraisal approaches, and your sale timeline. Address known maintenance items, organize disclosures early, and present the property thoughtfully to widen your buyer pool and support your pricing.
Alternatives to consider
Depending on your goals, one of these options may fit better than a bridge loan.
- HELOC: lower cost and flexible draw, but variable rates and credit limits depend on equity and lender rules.
- Home equity loan: fixed rate and predictable payments, but may not close fast enough for purchase timing.
- Contingent offer: avoids bridge cost, but is less competitive in a tight market.
- Sell first with temporary housing: no double-carry cost, but disrupts routine and adds short-term housing costs.
- Family or private bridge: potentially lower cost and flexible, but requires careful legal and family planning.
- Negotiated solutions: delayed closing, leaseback, or seller financing, if the seller is willing.
Move-up checklist
Use this quick checklist to plan your Orinda move-up with confidence.
- Define your exit strategy: plan to repay the bridge with sale proceeds or refinance.
- Estimate equity and net proceeds from your current home, including selling costs and any repairs.
- Get pre-approved for your new mortgage and secure a bridge term sheet early.
- Prepare disclosures and address known hill-home issues that could slow escrow.
- Choose market timing that fits your family’s calendar and Orinda seasonality.
- Align pricing, staging, and marketing to shorten days on market and protect your exit.
- Keep cash reserves to cover several months of dual payments.
- Confirm that your bridge loan allows early payoff without penalty.
A strong plan reduces stress and helps you capture the right home without sacrificing value on your sale.
If you want a thoughtful strategy for buying first and selling well, our team pairs design-forward listing prep with disciplined execution so you hit your timing and value goals. For a tailored plan and lender introductions, reach out to Hope Broderick. Start your home transformation.
FAQs
How long do bridge loans last for Orinda buyers?
- Most run 6 to 12 months, though actual terms vary by lender and product.
Will I pay interest on both homes during the bridge?
- Yes. You will make payments on the new mortgage and continue or cover payments on the existing mortgage until it sells. Many bridge loans are interest-only during the term.
How much can I borrow with a bridge loan?
- Lenders size the loan based on your equity, credit profile, income, and overall ability to repay. Maximum amounts and structures vary by lender.
What if my home does not sell before the bridge ends?
- You may need to extend or refinance the bridge, use reserves to cover payments, or adjust your sale strategy. Planning conservative timelines and pricing helps reduce this risk.
Are bridge loans available in the Bay Area market?
- Availability varies. Banks, mortgage lenders, and specialized bridge providers may offer products. Terms depend on equity, credit, and current market conditions.
