Rates: 9.95% to 10.95% (APR 11.40% to 13.22%) Points: 1.25 to 1.95 LTV: Up to 65-70%
Owner-occupied funding: 2 to 2.5 weeks Investment property: 5 to 7 days Term: Up to 11 months
No appraisal fee. No prepayment penalty. No lender fee. Over $1 billion in private money loans funded since 1981.
Bridge Loan for Home Purchase
A bridge loan for home purchase solves one of the most common problems in real estate: you've found the home you want, but your current home hasn't sold yet. Without a bridge loan, your choices are limited. You can make a contingent offer (weak in most markets), wait until your home sells (and risk losing the property to another buyer), or find temporary housing while the transaction unfolds.
A bridge loan gives you a third option. It uses the equity in your current property to fund the purchase of your new home. You buy the new home, move in, and then sell the old one. The sale proceeds repay the bridge loan.
- Purchase the new home before the existing one sells
- Avoid losing a desirable property to a competing buyer
- Move directly into your new home without temporary housing
- Sell your existing property on your own timeline
Bridge Financing Real Estate
Bridge financing is purpose-built for time-sensitive real estate transactions. The defining characteristic is speed: when a conventional lender would take 30 to 60 days, a hard money bridge lender can fund in days or weeks.
For investors, that speed is often the difference between capturing an opportunity and watching it go to someone else. An undervalued property, a distressed sale, or a time-limited deal all require capital that moves at the same pace as the transaction.
Bridge loans bridge the gap between where you are financially and where you need to be for the purchase. The loan is secured by real estate and repaid when the property is sold or refinanced into longer-term financing.
Bridge Loan Lenders
Not all bridge loan lenders are the same. Banks occasionally offer bridge products, but their approval process is slow, their criteria strict, and they are unlikely to fund against properties that are listed for sale or that have title complications.
Private hard money lenders specialize in bridge lending. They underwrite based primarily on the real estate asset rather than the borrower's income history or credit score. That makes them faster, more flexible, and often the only option for borrowers who do not fit the conventional lending box.
When evaluating lenders, compare interest rates, origination points, funding timelines, and whether they charge appraisal fees or additional lender fees. North Coast Financial has funded over $1 billion in private money loans since 1981, with rates from 9.95% to 10.95%, points from 1.25 to 1.95, and no appraisal fee or separate lender fee.
Short-Term Bridge Loans
Bridge loans are explicitly short-term instruments. At North Coast Financial, residential bridge loans are available for up to 11 months. The expectation is that the borrower will sell the existing property or refinance into permanent financing within that window, repaying the bridge loan in full.
Monthly payments are required during the loan term. Because the term is short, the total interest paid is typically modest relative to the benefit the loan provides. The rate is higher than a conventional mortgage, but the loan is not designed to be held for 30 years.
Residential Bridge Loans
Residential bridge loans are specifically designed for homeowners who are buying a new primary residence before selling their existing one. They differ from investment bridge loans in one important regulatory way: because they are secured by owner-occupied property, they are subject to federal lending regulations that extend the funding timeline to 2 to 2.5 weeks.
Within those constraints, residential bridge loans offer something conventional lenders rarely provide: approval based on the equity in your property rather than strict income documentation requirements. Seniors, retirees, self-employed borrowers, and others who have real estate equity but unconventional income situations often find bridge loans are the only path forward.
Commercial Bridge Loans
Commercial bridge loans serve real estate investors and business property owners who need temporary financing for acquisitions, renovations, or transitions between financing arrangements. The underlying logic is the same as residential bridge lending: short-term capital secured by real estate, repaid when permanent financing is arranged or the property is sold.
Because commercial properties are investment assets, they fall under different regulations and can often close faster than owner-occupied residential loans. Investment properties at North Coast Financial close in 5 to 7 days.
Bridge Loan Rates
Bridge loan rates are higher than conventional mortgage rates. That reflects the short-term nature of the loan, the speed of funding, the flexibility of underwriting, and the private capital that makes it possible. Borrowers are paying for a financial tool that conventional lenders cannot or will not provide.
| Detail | North Coast Financial |
|---|---|
| Interest Rate | 9.95% to 10.95% |
| APR | 11.40% to 13.22% |
| Origination Points | 1.25 to 1.95 |
| Lender Fee | None |
| Appraisal Fee | None |
| Prepayment Penalty | None |
| Max LTV | 65% to 70% |
| Loan Term | Up to 11 months |
When comparing bridge lenders, look at the total cost: rate, points, fees, and any prepayment penalties. A lender with a slightly lower rate but higher points and appraisal fees may end up costing more overall.
Bridge Loan Calculator
A bridge loan calculator helps you estimate your monthly payments and total interest cost before you commit. To use one, you'll need the loan amount, the interest rate, and the loan term in months.
For a rough calculation: multiply the loan balance by the monthly interest rate to get your monthly payment. If you borrow $500,000 at 10.45% (the midpoint of our range), that's approximately $4,354 per month in interest. Over 4 months, that's about $17,416 in total interest before closing costs. For most borrowers, that's a manageable cost given that it enables the purchase of a new home without contingencies and without moving twice.
Bridge Loan Requirements
Hard money bridge loan requirements center on the real estate itself rather than the borrower's financial profile. The key factors are:
- Property equity: Significant equity in the existing property is required. LTV up to 65% to 70% on the collateral property.
- Exit strategy: A clear plan to repay the bridge loan, typically the sale of the existing property or refinance into long-term financing.
- Property as collateral: The bridge loan is secured by real estate. The lender's primary concern is the value and marketability of that collateral.
- Credit and income: Hard money lenders can be flexible on credit and income documentation. Poor credit, past foreclosures, or unconventional income are not automatic disqualifiers.
Owner-occupied bridge loans qualify as an exemption to the federal Ability to Repay rule, which means strict income documentation requirements that apply to conventional mortgages do not apply in the same way. The exit strategy of selling the existing property is the basis for repayment.
Getting Started
Bridge loans are a practical tool for real estate buyers and investors who need capital that moves at the speed of the transaction. Whether you are buying a primary residence before selling your current home or pursuing an investment opportunity with a tight window, a bridge loan can make it possible.
North Coast Financial has been funding private bridge loans in California since 1981 with over $1 billion in loans funded. Call us at (760) 722-2991 or send a message to discuss your situation.