Buying in Mill Valley before selling your current home can feel like threading a needle. You want to move with confidence, win the right home, and keep your finances on track. If you are weighing a bridge loan, you are not alone. In this guide, you will learn how bridge loans work in Marin, what lenders look for, the risks and costs, and a simple checklist to help you decide. Let’s dive in.
What a bridge loan is
A bridge loan is short-term financing that lets you close on a new home before selling your current one. You use it to cover the timing gap between purchase and sale. It is popular in competitive markets where non-contingent offers help you stand out or when you are moving into a higher-priced area like Marin.
Common structures
- Purchase bridge loan: Funds advance toward your new purchase while your existing home remains collateral.
- HELOC or second mortgage: A home equity line provides short-term liquidity for your down payment or closing costs.
- Cross-collateralized loan: The lender takes a lien on both properties and is repaid when you sell your current home.
- Private or bank bridge products: Some lenders tailor bridge loans for high-value and jumbo-price markets.
Typical terms and features
- Term length: Usually 6 to 12 months, with possible extensions.
- Payments: Often interest-only during the term, with principal due at sale or refinance.
- Interest rates and fees: Rates are generally higher than conventional mortgages, with origination and appraisal fees. Some loans include conversion or exit fees.
- Collateral and equity: Your current home, or both homes, secure the loan. Lenders expect sufficient equity.
- Repayment: Sale proceeds typically repay the bridge loan. Any remaining funds can pay down your new mortgage or go back to you.
Why buyers use them in Mill Valley
- You can make a non-contingent, competitive offer in a fast-moving market.
- You avoid losing a desirable home while you wait for your sale to close.
- You simplify logistics by moving into your new home first and selling after.
Mill Valley and Marin context
Marin County often sees inventory and activity rise in spring and early summer, then slow in late fall and winter. Mill Valley has high demand and limited supply, which can intensify multiple-offer situations when inventory is tight. Many homes sit above regional median prices, so jumbo mortgages are common. Bridge loans in this range often require lenders who can coordinate jumbo underwriting.
Insurance is a key factor in Marin. Wildfire risk can affect your ability to secure hazard insurance and your closing timeline. California escrow periods commonly run 30 to 45 days, and lender conditions, repairs, or insurance delays can extend the timeline you carry both properties.
How approval works
Lenders focus on your equity, combined leverage, and your plan to sell. Expect detailed documentation and appraisals.
What lenders assess
- Equity and collateral value: Appraisals determine usable equity and loan limits.
- Combined loan-to-value (CLTV): Lenders calculate CLTV across the bridge and existing mortgages and keep it conservative.
- Debt-to-income and repayment: You may need to qualify for both the purchase mortgage and the bridge, or show sale proceeds that will repay the bridge.
- Credit and history: Strong credit improves pricing and approval odds.
- Income and reserves: Pay stubs, tax returns, bank statements. Many lenders want several months of liquid reserves.
- Sale plan: A realistic listing and pricing strategy matters. Lenders may ask for a listing agreement or broker price opinion.
- Appraisal and title: Expect appraisal reviews and title checks for existing liens.
Marin-specific considerations
- Jumbo coordination: Your lender should align bridge and jumbo underwriting to avoid conflicts at closing.
- Wildfire insurance: Proof of adequate hazard coverage is required and can delay approval if not secured early.
- Valuation variability: Mill Valley comparables can be uneven due to lot and home differences, which can affect appraised value and loan terms.
Steps to get a bridge loan
- Pre-qualify with a lender that offers bridge products and handles jumbo loans.
- Provide income and asset documentation, current mortgage statements, and your listing plan.
- Order appraisals on the collateral property and possibly the new purchase.
- Review the bridge commitment for rate, term, fees, and repayment.
- Coordinate closings so bridge funds arrive at purchase and are repaid at sale.
Timing and coordination
Underwriting for bridge loans can be faster than a full mortgage, but you should allow 2 to 4 weeks for approval. Appraisals and insurance can add 1 to 3 weeks. California escrows often run 30 to 45 days. Align your lender timelines with your purchase escrow and your listing plan to avoid funding gaps.
Costs and risks to budget
Bridge financing can help you win the right home, but you should plan for the full cost of carrying two properties.
- Double carrying costs: Two mortgages, taxes, insurance, utilities, and maintenance until your sale closes.
- Interest and fees: Bridge interest, origination and appraisal fees, plus any exit or extension fees.
- Market risk: If your current home sells for less or takes longer than expected, proceeds may not cover the bridge comfortably.
- Appraisal shortfalls: Lower-than-expected valuations may require more cash or different terms.
- Insurance delays: Wildfire coverage issues can postpone closing.
- Liquidity risk: Many lenders require substantial reserves. Insufficient reserves can block approval.
Alternatives to consider
- Sale contingency: Keeps risk low but is less competitive in hot markets.
- Rent-back or leaseback: Negotiate occupancy to reduce or eliminate overlap.
- HELOC or cash-out refinance: Potentially lower rates, but timelines and terms vary.
- Private financing or seller financing: Faster in some cases but may be costlier or limited by seller preference.
- Cash purchase: Strongest path if available.
- Wait to buy: Avoids bridge costs but risks losing the home you want in a competitive window.
Decision checklist for SF and Peninsula sellers
Use this quick check before you commit to a bridge loan.
- Equity: Do you have substantial equity for collateral? If not, a bridge is unlikely.
- Competitive necessity: Will a non-contingent offer be needed in your target Mill Valley neighborhood?
- Market timing: Are you listing into a favorable window, or do conditions point to a longer sale timeline?
- Liquidity: Can you cover double payments and fees for several months if needed?
- Insurance readiness: Can you secure hazard and wildfire coverage quickly on the new home?
- Plan B: If your home does not sell on schedule, can you handle an extension or larger carry?
- Tax planning: Have you asked a tax professional about interest deductibility and timing?
Scenarios: Which path fits you
- Scenario A, higher readiness: You have strong equity and reserves and face multiple offers. A bridge loan to make a clean, non-contingent offer can be reasonable. Get pre-approval and budget conservative carrying costs.
- Scenario B, moderate readiness: You have equity but limited reserves. Consider a HELOC or negotiate rent-back to reduce overlap. Use a bridge only with a confirmed sale plan and realistic pricing.
- Scenario C, lower readiness: Limited equity and tight cash. Prefer selling first, using a contingency, or delaying the purchase.
Sample timeline when moving north
- Pre-approval for the new mortgage and initial bridge review, about 1 to 2 weeks.
- Make an offer in Mill Valley and open escrow. Aim for 30 to 45 days to close.
- Prepare and list your current home immediately after the purchase is secure, with staging and repairs done pre-list when possible.
- Expect the sale to vary by season. Build a contingency plan for 1 to 6 months.
- Repay the bridge loan at your sale closing.
Practical tips to reduce risk
- Get bridge pre-approval and terms in writing before making a non-contingent offer.
- Order appraisals early and confirm insurance availability as soon as you identify a target home.
- Use realistic days-on-market estimates based on current Mill Valley and Marin conditions.
- Budget conservative carrying costs and include them in your affordability analysis.
- Negotiate flexible closing dates or rent-backs to align dates.
- Confirm repayment mechanics and any penalties for early payoff or extensions.
Final thoughts
A bridge loan can be a smart, short-term tool when you are buying in Mill Valley and need to move fast. The key is to match the tool to your financial profile, your listing strategy, and current market conditions in Marin. With the right preparation, you can reduce risk, keep your options open, and secure the home that fits your next chapter.
If you want a clear plan tailored to your move, connect with Apsara Oswal for calm, organized guidance and a market-grounded strategy. Request a free home valuation to understand your equity and timing.
FAQs
What is a bridge loan for a Mill Valley purchase?
- A bridge loan is short-term financing that lets you buy your Mill Valley home before selling your current property, then repay the bridge from sale proceeds.
How long does bridge loan approval take in Marin?
- Plan for about 2 to 4 weeks, with appraisals and insurance adding 1 to 3 weeks depending on scheduling and underwriting.
What costs should I expect with a bridge loan?
- Expect higher interest than a traditional mortgage, plus origination and appraisal fees, possible exit or extension fees, and the cost of carrying two homes.
Can I qualify if I still have my current mortgage?
- Many lenders require you to qualify for both the new mortgage and the bridge, or show that sale proceeds will repay the bridge, along with adequate reserves.
How can wildfire insurance affect my Marin closing?
- Lenders require proof of adequate hazard and wildfire coverage. Difficulty binding insurance can delay approval and closing.
What if my current home sells for less than planned?
- Build a conservative plan that includes extra reserves, and discuss alternatives such as extensions or temporary financing if proceeds fall short.
