BRIDGE LOANS IN CALIFORNIA
BRIDGE LOAN FINANCING FOR CALIFORNIA REAL ESTATE
BRIDGE LOANS IN CALIFORNIA
Independent Lending offers Bridge loans in California. Quickly tap into the equity of your existing property to purchase your new property. Contact us today!
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Independent Lending is one of the top direct lenders of bridge loan financing for California real estate. With 40 years of combined mortgage experience and millions in funding each year, we specialize in helping homeowners with fast approvals and funding times. We have excellent customer service and competitive rates for California bridge loans.
Contact us today to discuss your scenario and how we can assist with your mortgage lending goals.
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Sometimes life events don’t always line up like we wish they would. Whether you have a bill payment coming due right before you get paid or your car breaks down just when your warranty expires, life can throw everyone curveballs, with real estate being no exception.
There might be times where you want to buy a new property but are in the process of selling your current property which hasn’t closed yet. A bridge loan might be the solution that will allow you to have your cake and eat it too.
Let’s face it, passing up your chance to buy your perfect property can be a bitter pill to swallow. That’s why Independent Lending offers affordable bridge loans in California to make sure all borrowers can buy their dream home when they want it.
Bridge loans are a fast and simple financing solution that have both impactful residential and commercial applications. Here is everything you need to know about how to successfully use a bridge loan in California.
What is a Bridge Loan
When lenders talk about bridge loans, they aren’t referring to the Golden Gate or Brooklyn Bridges. Rather, bridge loans in California are a form of short-term financing secured by existing real estate that bridge a gap in the assets you have on hand.
According to the National Association of Realtors, over a third of repeat homebuyers use the proceeds from the sale of a current home to purchase a new residence.
In this regard, sometimes bridge loans in California are referred to as gap financing, because they help temporarily fill a hole in the process or “bridge the gap” between buying a new property and selling a current one.
Bridge loans in California can take first, second, or even third lien positions and often have a loan term between 6-12 months. Some private money lenders may have certain restrictions for lien position and loan terms.
Nevertheless, unlike traditional lenders typically shy away from bridge financing, bridge loans are commonplace amongst reputable private money lenders like Independent Lending who understand the need for additional flexibility in both residential and commercial situations.
Residential vs Commercial Bridge Loans
Bridge loans in California can be used for both residential and business purposes. Because bridge loans are often used to help finance the purchase of real estate, borrowers mistakenly think they can only be used for personal use.
However, bridge loans are also a great tool for businesses that need short-term financing. Just like a residential bridge loan, California allows businesses to use a bridge for commercial purposes. Commercial bridge loans are still often secured by real estate, but the funds may be used to support a variety of business processes and objectives.
Similarly, bridge loans can be a great tool for businesses who have a deficiency in short-term liquidity or don’t want to go through the rigorous process of finding a traditional lender that offers commercial lines of credit.
Typically, private money lenders are less concerned with your personal income and creditworthiness when qualifying you for a new residential bridge loan. Rather, they focus more on the underlying value and condition of the property securing the loans.
Since commercial bridge loans can be a bit more complex, they may require more stringent loan-to-value (LTV) guidelines and additional documentation. Nevertheless, businesses can still take advantage of the benefits that commercial bridge loans in California can provide.
Best Ways to Use Bridge Loans in California
Borrowers often gravitate toward private money bridge loans because they can be extremely flexible. Independent Lending recommends bridge loans in California to those who need quick access to capital and want to close in record time.
Before you apply for a private money bridge loan, it’s important to identify whether the funds will be used for residential or business purposes. Once you have figured out the type of bridge loan that fits your situation, here are a few of the best ways to use your bridge loan proceeds.
● Putting an offer on a home in a seller’s market with high inventory churn
● Buying a property without an offer contingent on selling your current home
● Lack of funds for a down payment or don’t want to liquidate other investments
● Want to close and move into your new home before your old home sells
● Covering operating costs while waiting to be approved for long-term financing
● Having the option to buy and close on new real estate opportunities quickly
● Take advantage of one-time discounts, rebates, or limited offers when purchasing business assets
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Pros and Cons to California Bridge Loans
Bridge loans can offer several unique advantages over other types of short-term financing. However, with any loan there can be some potential drawbacks. Let’s look at some of the advantages and disadvantages of using a bridge loan in California.
Advantages to Using a Bridge Loan
The biggest advantage to using a bridge loan in California is that you can get access to cash faster than a traditional mortgage by leveraging equity in real estate you currently own.
You also don’t have to go through the same rigorous application process or demonstrate your ability to repay (in a traditional sense) when obtaining a bridge loan if you use a premier, private money lender like Independent Lending.
Lastly, bridge loans also allow you to structure new real estate purchases in the manner that works best for you. Having more control over the purchase process can reduce stress and provide peace of mind.
Borrowers typically use this type of financing to start or inject money into an existing business. The use must be business-purpose, not consumer-purpose, to meet state regulations.
If your use qualifies, your credit, income, or debt will only be a small factor in the decision process. Instead, the focus is on your property’s value and the amount of equity you have in the home. Unlike conventional loans, hard money owner-occupied loans are for shorter terms, usually no more than five years, so make sure you discuss your exit strategy with the loan officer that you’re working with.
Disadvantages to Using a Bridge Loan
Compared to other financing solutions, bridge loans can be a bit more expensive. Understand that when you use a bridge loan in California, you are paying for heightened flexibility. That means your interest rate and origination costs could be higher.
Bridge loans are also not a great option if you don’t have sufficient equity built up in an existing owned property. Bridge loans are a powerful tool but only if you have tappable equity.
Lastly, bridge loans can be structured in a variety of ways. In most situations, you may be stuck paying both your bridge loan and your current mortgage payment until you sell your current property. This is something to be mindful about as you explore whether you can afford a bridge loan in California.
California Bridge Loan Highlights
Bridge loans are a flexible short-term financing solution that can be used to help you buy new real estate without having to spend the time worrying when your current property will sell.
While many borrowers think bridge loans can only be used for residential purposes, businesses can also leverage the power of bridge loans in California for commercial purposes. Some of the ways to use a bridge loan for your business include buying inventory at a discount or quickly pursuing new real estate opportunities.
However, you choose to use a new bridge loan in California, Independent Lending can help by offering outstanding service and streamlined processes that offer fast approvals. With over 40 years of combined experience, Independent Lending is your premier private money lender that will bridge the gap in mortgage financing needs.
How We Can Help
Independent Lending provided a $80,000 bridge loan on an investment property in Vallejo, California. The loan was secured by a single-family residence with an appraised value of $595,000. The homeowners requested the funds to put a down payment on a new purchase and conventional financing was taking too long. The borrower did not want to lose the opportunity and get beat out by other offers. We were able to complete the new loan within 2 weeks. Income and credit were not a major factor in the approval process.
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Frequently Asked Questions About California Bridge Loans
Yes, they are also known as: bridging loan, bridge financing, bridge loan mortgage, bridge mortgage, gap financing, caveat loan, interim financing, and swing loan.
Typically it can take two to three weeks to fund your new bridge loan. We understand the urgency and will make it a priority to obtain funding as soon as possible. We fund residential and commercial bridge loans in California.
No down payment is required. The equity in your home replaces the typical down payment.
Need a California Bridge Loan?
Contact Independent Lending
Call Toll Free: 1.800.315.0043 / Local: 949.830.3151 or click the Contact Us button to fill out our secure web form for a call back. At Independent Lending, we give every loan request the respect it deserves.