Ready to buy your next Santa Clarita home, but not quite ready to sell your current one? You’re not alone. Many move-up buyers want a smoother, single move without a sale contingency. This guide explains how bridge loans can help you buy first, what they cost, when they make sense in Santa Clarita, and the steps to take before you jump in. Let’s dive in.
What is a bridge loan
A bridge loan is short-term financing that fills the gap between buying a new home and selling your current home. It is often secured by your current property, the new property, or both. Many products are interest-only and get paid off when your old home sells or when you replace the bridge with a permanent mortgage.
Common structures include:
- Closed bridge loan: payoff tied to a planned sale within a set timeframe.
- Open bridge loan: no firm sale date required, usually at a higher cost due to lender risk.
- Bridge-to-perm: the bridge converts into your new long-term mortgage.
- HELOC-as-bridge: some owners use a home equity line or cash-out refi instead of a dedicated bridge loan.
For a quick primer, see this clear bridge loan overview from Investopedia and the NerdWallet guide to bridge loans.
How bridge loans work when you buy first
Most buyers use a bridge loan to unlock equity for a down payment on the next home. During the bridge period, you may have interest-only payments. Typical terms range from 6 to 12 months, and some lenders go up to 24 months.
Lenders underwrite your ability to carry both properties for a short time. They review your credit, debt-to-income ratio, reserves, and a realistic plan to sell your current home. Many lenders also look for a listing agreement or market comps that show your home should sell promptly at the expected price.
Costs and terms to expect
Bridge loans cost more than standard first mortgages because they are short term and higher risk. Total cost depends on your rate, fees, and how long you carry the loan.
- Interest rates: generally higher than conforming first-mortgage rates. Many are interest-only during the term.
- Fees and closing costs: expect mortgage-like closing costs such as origination, underwriting, appraisal, title and escrow fees. Origination fees commonly run about 1 to 3 percent of the loan amount, though it varies by lender.
- Loan-to-value limits: lenders cap combined LTV across your current mortgage plus the bridge. Typical maximums range from about 65 to 80 percent, depending on your profile and the collateral.
- Repayment: usually due when your current home sells or when you close on a permanent mortgage. Some products allow roll-in to your new loan.
- Prepayment terms: some lenders charge prepayment penalties or minimum interest if you pay off very quickly. Ask upfront.
For a refresher on common mortgage closing costs and how to compare offers, review the CFPB’s guide to closing costs. You can also skim a concise product explainer in Bankrate’s bridge loan overview.
Is a bridge loan right for you in Santa Clarita
The right call blends your finances, the local market, and your risk comfort. Use this framework to decide.
Baseline financial tests
- You have enough equity after mortgage payoff and selling costs to fit a lender’s combined LTV limits.
- You can cover carrying costs on two homes for a few months - mortgage, taxes, insurance, utilities, HOA, and maintenance.
- Your credit score and debt-to-income ratio meet short-term financing standards.
Best-fit situations
- You want to make a stronger, non-contingent offer in a competitive segment of Santa Clarita - often in popular neighborhoods like Valencia, Saugus, Newhall, or Canyon Country where well-priced homes can move fast.
- You prefer to move once without staging and showing your current home while you still live there.
- You and your agent see a high probability of a quick sale based on recent comps and professional pricing.
When to pause or reconsider
- Your segment of the market is slower - higher price tiers or unique properties can take longer to sell.
- Your equity or reserves are tight, and a longer time-to-sell would strain your cash.
- You have very low risk tolerance for carrying two homes or for a sale price that could come in below expectations.
To gauge current conditions by neighborhood and price range, review the California Association of Realtors market data and your agent’s local MLS snapshots for days on market and inventory trends.
Santa Clarita specifics to keep in mind
Santa Clarita is part of the greater Los Angeles metro, and momentum can shift by price tier and neighborhood. Things like school district boundaries, HOA rules in planned communities, commute patterns, and broader LA buyer demand often influence pace and pricing. Your listing strategy - pricing, staging, and marketing - should reflect today’s data in your micro-market, not last season’s.
The bottom line: a bridge can be a powerful tool when your segment is moving, your pricing is on point, and you have the reserves to carry for a few months.
Alternatives to compare
A bridge loan is not your only option. Compare these paths with your lender and agent.
- Sale-contingent offer
- Pros: cheaper, avoids carrying two homes.
- Cons: weaker in competitive markets and often declined.
- Rent-back or flexible closing
- Pros: coordinates timing if the buyer of your current home allows you to stay briefly after closing.
- Cons: depends on buyer willingness and negotiation.
- HELOC or home equity loan
- Pros: often lower rates, flexible draws.
- Cons: requires sufficient equity and DTI; you may still carry two payments.
- Cash-out refinance
- Pros: converts equity into cash at mortgage rates.
- Cons: resets your loan and takes time - less appealing if your current rate is very low.
- Personal or margin loan
- Pros: fast for small amounts.
- Cons: usually higher rates and limited size - rarely ideal for large down payments.
- Seller financing or carryback
- Pros: flexible if offered.
- Cons: uncommon in primary home sales and driven by seller preference.
For a side-by-side explanation of how bridge loans compare in concept, see the straightforward NerdWallet primer.
Simple cost-and-risk worksheet
Before you shop homes, run a few quick scenarios so you know your guardrails.
- Estimate equity and net proceeds
- Expected sale price minus mortgage payoff and estimated selling costs - agent commission, closing costs, and any repair credits.
- Estimate carrying costs for 30, 90, and 180 days
- Current mortgage plus bridge interest, property tax, insurance, HOA, utilities, and routine maintenance.
- Test three sale-price outcomes
- High, expected, and low. Note the minimum sale price that keeps you from dipping into emergency savings.
- Compare alternatives
- Run the same math for a sale-contingent offer or a HELOC so you can weigh cost versus offer strength.
- Decide your comfort zone
- Confirm how many months you can safely carry two homes and still sleep well at night.
How to get started in Santa Clarita
A little prep sets you up for a smooth buy-before-you-sell move.
Pre-evaluation
- Gather your current mortgage statements, recent pay stubs, tax returns, HOA documents, and any listing agreement or market valuation.
- Ask your agent for realistic days-on-market and net proceeds based on recent comps.
- List your estimated carrying costs and build a cushion.
Talk to lenders and compare quotes
- Ask about bridge loan options, maximum combined LTV, interest rate structure, total fees, and any prepayment terms.
- Request quotes from multiple banks, credit unions, and mortgage brokers. Compare the total cost and timeline to close.
- Ask if a bridge-to-perm option is available and how it would work with your new mortgage.
Coordinate with your agent and advisors
- Align your listing strategy to shorten time on market - pricing, staging, photography, and launch plan.
- Confirm any tax questions with a professional. Interest deductibility depends on IRS rules and how your loan is secured. Review the IRS mortgage interest guide and then get advice for your situation.
- Ensure your escrow and title teams document the payoff path from sale proceeds to close out the bridge loan.
Our role in a buy-before-you-sell move
You deserve a calm, well-orchestrated move. Our team blends deep Santa Clarita neighborhood knowledge with a high-touch coordination model so you can buy first with confidence, then sell for maximum results. We help you price and prepare your current home to move quickly, market it across MLS syndication and national channels, and manage the logistics so you avoid delays and surprises.
If you are weighing a bridge loan, we will give you data on your micro-market, connect you with experienced lenders, and craft a plan to minimize your carry time. When you are ready, we will guide your purchase and sale so you move once and move well.
Ready to explore your options or get your numbers? Reach out to Valerie Gutierrez for a friendly strategy session.
FAQs
How long do bridge loans typically last in California
- Most run 6 to 12 months, and some lenders offer terms up to 24 months.
Are bridge loans more expensive than regular mortgages
- Yes. Rates are usually higher than first-mortgage rates and you will see mortgage-like closing costs such as origination and appraisal fees.
Do I make interest-only payments during the bridge period
- Many products are interest-only, but policies vary by lender. Confirm payment structure and any prepayment terms before you sign.
Can a bridge loan help me make a non-contingent offer in Santa Clarita
- Often yes. A bridge can provide the down payment so you can avoid a sale contingency, which can strengthen your offer in competitive segments.
What happens if my Santa Clarita home takes longer to sell
- You must be able to carry both homes until your sale closes. Run 30, 90, and 180-day scenarios and confirm you have cash reserves for the unexpected.
Is bridge loan interest tax deductible
- It may be, depending on how the loan is secured and used. Start with the IRS rules on mortgage interest and then confirm with your tax advisor.
