Have you found the right North Tustin home before your current one is ready to hit the market? You are not alone. In a competitive Orange County market, timing can be the toughest part of moving up. The good news is that a bridge loan can let you buy first, then sell, without making a contingent offer. In this guide, you will learn how bridge loans work, what they cost, how to qualify, and a simple plan to use one with confidence in North Tustin and the broader Anaheim–Santa Ana–Irvine area. Let’s dive in.
Bridge loan basics
What it is
A bridge loan is a short-term loan that uses your current home as collateral so you can access equity for the next purchase. It “bridges” the gap between buying a new home and selling your existing one. Some structures attach only to your current home, while others are set up as a second loan tied to your new purchase. A home equity line or loan can sometimes fill a similar role depending on limits and timing.
How repayment works
Most bridge loans are repaid when your current home sells. Proceeds from the sale pay off the bridge balance and any interest that accrued. In some cases, you can refinance into a permanent mortgage after you sell or once you meet the lender’s criteria, which ends the short-term financing.
Common terms and costs
Bridge loans are short term, typically 6 to 12 months. Payments are often interest-only during the term, with principal due at payoff. Rates and fees are generally higher than a standard long-term mortgage because of the short duration and added risk. Always compare the total cost to other funding options and verify current terms with your lender.
Why it fits North Tustin
Low inventory pressure
Desirable single-family homes in parts of Orange County, including North Tustin, often see limited resale supply. When you have to sell before you buy, you can lose a great opportunity to someone who can close fast. A bridge loan can help you write a non-contingent offer and keep pace in multiple-offer situations.
Practical benefits
- Non-contingent offers. Your offer is not tied to selling your current home.
- Flexible timing. You can close on the new place, then list and sell without rushed decisions.
- Purchasing power. You can use existing equity to cover the down payment and closing costs.
Local nuances to consider
- Property type. Underwriting differs for single-family homes, condos, and income properties. Condos and planned developments with HOA rules may need extra lender review.
- Loan size. Higher Orange County price points can limit which bridge products are available. Some lenders cap loan amounts or combined-loan-to-value.
- Tax planning. Confirm capital-gains and primary residence rules with a CPA, especially if you plan to rent your current home instead of selling right away.
Who qualifies and what lenders review
Equity and CLTV
Lenders usually want substantial equity in your current home. Many look at a combined-loan-to-value limit across properties. A common target range is 70 to 80 percent CLTV, though every program is different.
Income, credit, and DTI
You will document stable income and an acceptable debt-to-income ratio. Strong credit saves cost and expands your options. You must be current on mortgage payments, and lenders will review title and lien position.
Sale readiness and appraisal
Because sale proceeds are a key payoff source, lenders pay close attention to marketability. Expect an appraisal, review of local comps, and questions about your pricing and marketing plan.
What it costs and how long it takes
Typical fees and carry cost
Expect a higher interest rate than a conventional mortgage, plus origination, appraisal, title, and escrow costs. Some products include prepayment or exit fees. Your carry cost risk is the interest-only payment during the term and the possibility of double housing expenses if your home takes longer to sell.
Timelines from preapproval to sale
- Preapproval. A few days to one or two weeks, depending on lender.
- Underwriting and closing. Often one to three weeks for the bridge to fund.
- Purchase escrow. In California, 17 to 45 days is common based on the deal.
- Sale timeline. In faster Orange County pockets, sales can happen in days or weeks, though it can take longer in changing markets. Because bridge terms are short, plan conservatively.
Documents you will need
- Mortgage statement and proof of ownership
- Appraisal or lender-ordered valuation
- Income documentation such as W-2s, 1099s, tax returns, and pay stubs
- Bank and asset statements
- Listing agreement or marketing plan if you plan to list right after you buy
Example North Tustin move-up plan
The example below is for illustration. Actual lender terms, rates, and fees vary.
- Current home in North Tustin: estimated value $1,200,000
- Current mortgage balance: $400,000
- Estimated equity: $800,000
- Target purchase: $1,900,000 move-up home
- Goal: write a non-contingent offer without waiting to sell
Hypothetical bridge solution:
- Bridge advance: $400,000, interest-only, 12-month term
- Example interest rate: 7.0 percent
- Estimated monthly interest-only payment: about $2,333 on $400,000
Possible flow:
- Get preapproved for both the bridge loan and your new long-term mortgage.
- Make a non-contingent offer on the $1,900,000 home using bridge funds for your down payment and closing costs.
- Close and move in. Prepare and list your North Tustin home.
- Sell your current home within the bridge term and pay off the $400,000 bridge balance plus accrued interest and fees.
- Complete any needed refinance for the new home per your loan plan.
Sensitivity check:
- If you sell in about 30 days, interest cost is near one month of carry plus fees.
- If you sell in about six months, interest could total around $14,000 plus fees. Plan for this range and ask your lender about extensions.
Risks and safeguards
Sale delay risk
If your current home takes longer to sell than expected, you could face higher overall cost or a need to extend or refinance. Price strategically, present the home well, and align your marketing timeline with your bridge term.
Market and cost risk
Changing market conditions can affect your sale price. Since bridge loans are more expensive than standard mortgages, run conservative scenarios so you understand the total potential cost.
Complexity and coordination
You are managing two transactions at once. Work with a team experienced in bridge timelines so that moving parts stay aligned and paperwork stays on track.
Alternatives to compare
- Home-sale contingency. Lower risk but often less competitive in multiple offers.
- HELOC or home equity loan. May cost less than a bridge depending on limits and timelines.
- Seller rent-back. Close on your sale but rent back for a short period while you buy.
- Family or private funds. Temporary down payment support if available.
- Rent current home and refinance. Requires comfort carrying two mortgages and managing a rental.
- Use cash reserves or investments. If accessible without disrupting your financial plan.
Decision checklist
- Confirm your North Tustin home’s market value, likely days on market, and pricing strategy.
- Get bridge loan preapproval with a written estimate of term, rate, total fees, and payoff triggers.
- Model three timelines: 30, 90, and 180 days to sell. Compare total cost and monthly carry in each.
- Ask about extension policies and whether the bridge requires simultaneous closings.
- Review tax implications with a CPA if converting a primary home to a rental or timing a gain.
- Align your agent, lender, and escrow so documents, timelines, and funding stay synchronized.
How we help North Tustin move-up buyers
Buying before you sell is a choreography of timing, presentation, and negotiation. Our team pairs local strategy with design-forward listing prep to shorten time to market and reduce carry risk. If your current home would benefit from targeted improvements, Compass Concierge can fund and manage value-adding updates that help you launch fast and show at its best. We coordinate with your chosen lender, set clear timelines, and build a pricing and marketing plan that supports a successful sale within your bridge term.
When you are ready to map your move-up path in North Tustin or nearby Orange County communities, reach out to the Summer Perry Group. We will help you compare options and move with confidence.
FAQs
What is a bridge loan for North Tustin buyers?
- A short-term loan that lets you use equity from your current home to buy your next home first, then pay the loan off when your original home sells.
How long do bridge loans usually last in California?
- Most terms are 6 to 12 months, sometimes longer with specific programs, and they are commonly interest-only during the term.
Can I make a non-contingent offer with a bridge loan?
- Yes. Accessing equity for your down payment can remove a home-sale contingency, which can strengthen your offer in competitive situations.
What are the main risks if my home does not sell in time?
- Carrying costs can add up, and you may need an extension or refinance. Plan conservative timelines and price to the market to reduce risk.
Are there alternatives to a bridge loan for move-up buyers?
- You can consider a HELOC or home equity loan, a home-sale contingency, a seller rent-back, family funds, or using cash reserves, depending on your goals.
How does Compass Concierge support a bridge-loan strategy?
- Concierge can fund and manage approved pre-sale improvements so your current home lists quickly and shows well, which can help shorten time to sale and reduce carry cost.
