What Is a Bridge Loan

A bridge loan is a short term loan that lets you use the equity in your current home to help purchase your next home. Instead of waiting until your home sells, you access your equity upfront. Once your current home sells, the bridge loan is paid off using the proceeds.

It is designed to remove pressure, give flexibility, and help you buy and sell on your own timeline.

How Bridge Loans Work for San Diego Homeowners

Here is the simplest way to understand them.

1. You apply for a bridge loan based on the equity in your current home.

2. The lender determines how much of that equity you can access.

3. You use that money as the down payment on your next home.

4. You move into your new home first.

5. Once you are settled, you list your old home in its best condition.

6. When it sells, the bridge loan is paid off.

It is a short term solution that makes the entire moving process smoother.

Why Bridge Loans Are Popular in San Diego

San Diego is a fast moving market. Desirable homes, especially in neighborhoods like Point Loma, North Park, Mission Hills, Del Cerro, Clairemont and La Mesa, often sell quickly. Buyers who make contingent offers are frequently beaten by buyers who are ready to move immediately.

A bridge loan gives you the ability to make a clean, non-contingent offer, which makes a huge difference. Sellers love the certainty, and you avoid losing the home you want simply because your timeline is tied to a sale.

Other reasons they work well here:

• Home values are high, so most homeowners have strong equity

• Many homeowners upgrade within the county and already own a property

• Bridge loans remove the need for temporary rentals or double moves

• You can prepare your home for sale properly before listing

What Bridge Loans Cost

Bridge loans usually have:

• A slightly higher interest rate

• A short term structure, usually six to twelve months

• Interest only payments

• Standard loan fees

They cost more than traditional mortgages, but they offer the one thing homeowners value most when moving, control. You get to move without chaos, pressure or competing timelines.

Bridge Loan Example for San Diego Buyers

Let’s say you own a home in Clairemont worth 1,150,000.
You owe 550,000 on your mortgage.
You have around 600,000 in equity.

A bridge loan might allow you to access 400,000 of that equity for the down payment on your next home.

You find a home in Point Loma for 1,600,000.
You write a strong, non-contingent offer.
You move into the home.
Once you are settled, you list your Clairemont property staged and empty, which almost always results in higher offers.

When it sells, the proceeds pay off the bridge loan and you move forward with your new home without stress.

Pros and Cons of Bridge Loans

Pros

• You can buy first and sell later

• You do not need temporary housing

• You avoid moving twice

• You can make competitive, non-contingent offers

• You present your old home in the best possible condition

• You are not rushed into listing your property

• It simplifies the entire transition

Cons

• Higher interest rate than a standard mortgage

• Short term solution, not a long term loan

• You must qualify based on income and equity

• Some lenders require strong debt-to-income ratios

Who Bridge Loans Are Best For

Bridge loans are ideal for:

• Homeowners who found their next home but aren’t ready to list

• Families needing more space

• Empty nesters downsizing

• Anyone who wants to avoid strangers touring their home while living in it

• Sellers who want their home staged and presented properly

• Buyers who want to remove the stress of a contingency

If you’re thinking about moving but feel stuck because you need to sell first, I can help you walk through your options and see if a bridge loan makes sense for your situation. I go through this process with clients all the time and can introduce you to the right lenders, help you understand what you qualify for, and create a smart plan for buying and selling without chaos.

Send me a message and I will guide you through each step.