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Bridge Loans in Sacramento: How to Unlock Home Equity to Buy Before You Sell
HomeLight
Real Estate
1 day ago
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Selling your current house while buying a new one can feel like a balancing act. Timing the sale and purchase just right — especially in a highly competitive market like Sacramento, California — can be a stressful undertaking.

When inventory is low and prices are high, it might seem like your only option is to sell your current house and move into a temporary place while you search for your forever home. But who wants to move twice? Thankfully, there’s another option.

A bridge loan might be just what you need to buy your next home without waiting to sell your current one. This short-term financing option gives you flexibility and control over your timeline. In this guide, we’ll walk you through everything you need to know about bridge loans in Sacramento.

Yes, You Can Buy Before You Sell. Why Move Twice?

Through our Buy Before You Sell program, HomeLight can help you unlock a portion of your equity upfront to put toward your next home. You can then make a strong offer on your next home with no home sale contingency.

Buy Before You Sell

What is a bridge loan, in simple words?

A bridge loan is a short-term financing option that helps you buy a new home while your current one is still on the market. It taps into the equity you’ve built in your existing property, giving you fast access to cash for a down payment or closing costs on your next purchase.

While bridge loans typically cost more than a traditional mortgage, many Sacramento buyers find the added flexibility worth it to avoid rushed sales or temporary housing.

Bridge loans are also sometimes called:

  • bridge financing
  • bridging loan
  • interim financing
  • gap financing
  • swing loans

How does a bridge loan work in Sacramento?

In Sacramento, bridge loans are common when you find the perfect new home but haven’t yet sold your current one. With a bridge loan, you can use your existing home’s equity to help fund the down payment and closing costs for your new property.

Often, the same lender handling your new mortgage can also offer the bridge loan. Most will require that your current home be actively listed for sale, and the loan term typically ranges from six months to a year.

Your lender may evaluate your debt-to-income ratio using your existing mortgage payment, the new mortgage payment, and interest-only payments on the bridge loan. However, if your current home is already under contract and the buyer has final loan approval, the lender may only factor in your new mortgage payment — offering more breathing room in your financial calculations.

What are the benefits of a bridge loan in Sacramento?

Here are a few ways bridge loans in Sacramento can help make your move smoother:

  • You can make a non-contingent offer: Sellers often prefer buyers without home sale contingencies.
  • You only need to move once: Skip the hassle and extra costs of temporary housing or storage.
  • You can ready your old home: Move out first, then focus on preparing your home with staging and repairs.
  • Some lenders don’t require payments during the loan period: You may not owe anything until your previous home sells.
  • You can act fast on the right home: Make an offer without worrying about selling first.

What are the drawbacks of a bridge loan?

While a bridge loan can give you more flexibility and alleviate some pressure during a buy-sell move, there are still a few downsides to consider:

  • Additional loan costs: You may pay underwriting fees, origination fees, and other closing costs.
  • Extra financial stress: You could be responsible for covering two mortgages and a bridge loan at the same time.
  • Qualifying may be more complicated: Lenders often have stricter requirements than they do for a traditional mortgage.
  • Underwriting can be slower: The review process might take more time than expected.

When is a bridge loan a good solution?

A bridge loan may not suit every real estate situation, but in the right circumstances, it can help simplify the move from one home to another. For those buying and selling at the same time, bridge loans in Sacramento can offer a valuable solution.

Here are a few scenarios where using one might make sense:

  • You need the equity from your current home for your new home’s down payment.
  • You can’t afford the costs of moving twice between selling and buying.
  • Your dream home just hit the market, and you want to jump on the opportunity before it’s gone.
  • Your offer’s home sale contingency has been a deal-breaker for sellers.
  • You’re unable to prepare or sell a staged home while still living in it and need to vacate first.

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