Buying your next home in Mill Valley before you sell your current one can feel like solving a puzzle with moving pieces. You want to write a strong, non-contingent offer in a competitive market, but most of your equity is locked in your present home. If that sounds familiar, a bridge loan could be the tool that lets you move first with confidence. In this guide, you’ll learn how bridge loans work in 94941 and greater Marin, what they cost, how to manage the timeline and risks, and how to coordinate the details so your sale and purchase stay in sync. Let’s dive in.
What a bridge loan is
A bridge loan is a short-term loan that covers the gap between buying a new home and selling your current one. It typically lets you access equity now, make interest-only payments during the term, and then repay the principal when your existing home sells or when you refinance into a longer-term mortgage.
For move-up buyers in high-demand areas like Mill Valley and Marin County, the main benefit is competitiveness. A bridge loan can help you make a non-contingent, cleaner offer on your next home without waiting for your sale to close.
How bridge loans work in 94941
Collateral and lien position
Most bridge loans are secured by your current home. Some lenders will take a first or second lien on that property, while others may cross-collateralize the bridge across both your current and new homes. Lien position affects pricing, underwriting, and how your future financing will be structured.
Underwriting basics
Lenders evaluate your credit score, debt-to-income ratio, and the loan-to-value on your current home. They look at your remaining mortgage balance, your reserves, and your plan to sell. Many will want proof that you intend to list within a set timeframe and that the anticipated net proceeds will be sufficient to repay the bridge.
Term and payment structure
Bridge loans are short. Typical terms range from 3 to 12 months, with the possibility of extensions for an added fee. Payments are often interest-only during the term, with principal due when your existing home sells or when you refinance. If your sale takes longer than expected, you continue making interest payments and may request an extension if your lender allows it.
What it costs
Bridge financing usually costs more than a standard 30-year mortgage because it is short-term and carries more risk for the lender. Expect the following components:
- Interest that is higher than long-term mortgage rates, often interest-only payments.
- An origination or facility fee, commonly a small percentage of the loan amount.
- Appraisal, title, and recording fees.
- Potential extension fees if your sale timeline runs long.
Hypothetical cost example
This illustration is for example purposes only. Assume you need a $300,000 bridge loan for 6 months to secure your Mill Valley purchase before selling:
- Interest-only rate: 8% annually (hypothetical)
- Origination fee: 1% of the loan amount ($3,000)
Interest over six months: $300,000 × 8% × 0.5 year = $12,000. Add the $3,000 origination fee for a total finance cost of $15,000 over that period, excluding appraisal, title, and escrow-related costs. Your actual rate, fees, and terms will vary by lender, credit profile, collateral, and timing. Always request current quotes specific to your situation.
When a bridge loan makes sense
A bridge loan can be a good fit when you have strong equity, solid credit, and a realistic plan to sell quickly. It is especially useful if your target home is likely to draw multiple offers and a contingent-to-sell offer will not be competitive. If you value timing and want to move once rather than juggling a temporary rental or storage, a bridge can streamline your transition.
It is less suitable when equity is thin, the current home needs substantial work to sell, or you cannot comfortably carry overlapping costs if the sale takes longer. If market conditions are shifting or you lack reserves, consider alternatives with lower carrying costs.
Alternatives to consider
Before you choose a bridge, compare these options and weigh competitiveness, cost, and timing:
- Contingent-to-sell offer: Lower cost, but less competitive in multiple-offer situations.
- HELOC or home equity loan on your current home: May offer lower rates, but requires sufficient equity and lender approval before you go into contract.
- Cash-out refinance: Can unlock equity, but the process can be longer and may affect your purchase timeline.
- Personal savings: Cheapest option if available, but reduces liquidity cushions.
- Seller rent-back or leaseback: Lets you sell first and remain in place briefly, but depends on buyer willingness and timing.
- Carry two mortgages temporarily: Feasible if you have strong reserves and income, but increases risk if the sale is delayed.
Local market realities in Mill Valley and Marin
Mill Valley and Marin County are high-cost, high-demand markets with limited inventory in many price bands. Well-priced single-family homes can attract strong interest, and sellers often prefer offers without a sale contingency. Timing and preparation matter. Some homes sell quickly, while others require more time depending on price, condition, and location.
What this means for you: a bridge loan can help you compete, but your listing strategy must be disciplined. A market-informed price, thoughtful preparation, and an efficient launch can lower your carrying time and reduce the chance of needing an extension.
How Brannan Palmer helps you move first
You need more than financing. You need a plan that aligns your purchase, your listing prep, and your sale. The Brannan Palmer Group pairs boutique, relationship-first service with Compass’s operational tools to make that plan real.
- Pre-list strategy: We provide a market-driven assessment so you understand likely days on market, target pricing, and expected net proceeds.
- Preparation and presentation: We coordinate staging and light renovations through Compass Concierge to help your home show its best and sell faster.
- Go-to-market timing: We tailor your launch strategy, including on-market MLS exposure or Compass Private Exclusives when appropriate, to align with your purchase timeline.
- Coordination with your lender and escrow: We help align the bridge loan closing, title requirements, and payoff logistics so funds are available for your purchase and the bridge is repaid promptly at closing.
- Ongoing communication: We create a clear communication plan so you always know the next step and the timeline for each milestone.
Sample timeline for a move-first plan
Use this as a general framework. Your lender’s process and your property’s specifics will define the exact steps and timing.
- Weeks –2 to 0: Secure preapprovals for both the bridge loan and your long-term purchase financing. Obtain a broker’s price opinion for your current home and finalize your listing plan.
- Week 0: Execute the purchase agreement on your new home. Confirm bridge funds will be ready at your purchase closing.
- Weeks 2 to 4: Complete bridge underwriting and close the bridge concurrent with your purchase escrow. Some lenders can close in 1 to 3 weeks.
- Weeks 0 to 6+: List your current home if not already live. Adjust strategy based on early feedback and activity.
- At sale closing: Repay the bridge loan principal, any interest due, and applicable fees. The lender releases its lien.
- If delayed: Follow the agreed extension process, pay extension fees if applicable, and keep cash reserves for overlapping costs.
Managing risk and protecting your plan
Every bridge loan strategy should include clear risk controls. Focus on the items you can influence and plan conservatively for the rest.
- Market timing risk: If your sale takes longer, be prepared with reserves to cover additional interest and carrying costs. Consider staging and strategic pricing to drive early momentum.
- Valuation risk: If the appraisal or market value comes in lower than expected, you may need to adjust the bridge amount or sale strategy. Use both a broker market analysis and, when helpful, an appraisal to set expectations.
- Liquidity strain: Two housing payments plus taxes, insurance, and utilities can add up. Confirm debt-to-income and reserve requirements with your lender before you go into contract.
- Cost uncertainty: Compare bridge quotes to alternatives like a HELOC or rent-back and choose the solution that balances cost, speed, and competitiveness.
Buyer checklist
Gather these items early to streamline underwriting and closing. A complete file can shave days off your timeline.
- Current mortgage statement and payoff information
- Recent tax returns, W-2s, pay stubs, and bank statements
- Broker price opinion or comparable sales for your current home
- Title history and property tax information
- Written plan to list your home, including staging, pricing strategy, and roles
- Communication plan across your agent, lender, and escrow
- Reserve funds to cover overlapping payments for a conservative period
Compass bridge options and coordination
Many brokerages, including Compass, partner with lenders to offer branded short-term financing programs that support buy-first strategies. Program details can vary by lender and market, so verify the specifics with your Compass advisor and the lending partner before you decide.
Key items to confirm:
- Product name, eligibility, and geographic coverage
- Maximum term, loan-to-value limits, and lien position
- Whether you must list your current home within a set timeframe
- Prepayment terms, any exit or extension fees, and how funds are disbursed
- Requirements for your future long-term financing so the bridge does not complicate your jumbo loan or refinance
A coordinated approach between your agent, lender, and escrow helps ensure the bridge funds are available when you need them and that repayment is seamless at closing.
Next steps
If you want the flexibility to buy first and sell second, a bridge loan can be a powerful tool when paired with a disciplined sale plan. The right structure, clear milestones, and strong communication reduce stress and protect your bottom line.
If you would like a tailored move-first plan and a market-based assessment of your sale timeline and net proceeds, reach out to Kristen Palmer. Request your complimentary home valuation and explore whether a bridge strategy makes sense for your goals.
FAQs
How long do bridge loans typically last in Marin?
- Most terms range from 3 to 12 months, with possible extensions at additional cost depending on lender approval.
Will a bridge loan affect my ability to get a jumbo mortgage later?
- It can, because the bridge is additional debt; coordinate with your lender to ensure future jumbo financing requirements are met before you commit.
What happens if my home does not sell before the bridge term ends?
- You continue making interest payments and may request an extension if available, which can include added fees; a strong sale plan reduces this risk.
How is a bridge loan secured against my property?
- Lenders typically place a first or second lien on your current home and may cross-collateralize with the new home depending on the program.
Are bridge loan interest and fees tax-deductible?
- Deductibility depends on current tax law and how the debt is classified; consult a qualified tax professional for guidance on your situation.
How fast can a bridge loan close compared with a standard mortgage?
- Many lenders can close a bridge in 1 to 3 weeks if documentation is complete, though timing varies by borrower and lender.
Is a HELOC a better choice than a bridge loan for buying first?
- A HELOC can cost less if you qualify and have time to secure it, but a bridge may be more competitive for fast, non-contingent offers in a tight market.
Do I make payments during the bridge loan term?
- Usually yes; most programs require interest-only monthly payments until the bridge is repaid at your home’s sale or refinance.
