When buying or selling a luxury home in Colorado, timing can be everything. A short-term bridge loan gives you the flexibility to purchase your next property without waiting for your current home to sell. Designed for homeowners and buyers in affluent neighborhoods, bridge loans provide fast access to funds to help you move with confidence and strategically buy in a competitive market.
For homeowners in Cherry Creek, Washington Park, or Boulder’s Mapleton Hill, where luxury homes often exceed $1.5 million, bridge loans help avoid the hassle of moving twice. Instead of placing belongings in temporary storage and coordinating multiple moves, borrowers can transition smoothly from one home to the next. They also allow sellers to wait for the best offer on their current property instead of making a rushed decision to sell and access cash. This gives them the freedom to maximize their list price and move on their own terms.
Bridge loans are short-term mortgage loans that provide you with the down payment or necessary funds to buy another home before you sell your current home in Colorado.
The timing of completing the sale of your existing home and buying another oftentimes can be a problem since you are unable to control the buyer's financing of your home. The sale of your current home may fall through or be delayed no matter how qualified your buyer is.
When your qualified buyer's purchase of your home falls through it can cause you to lose out on the perfect home you're under contract to buy. With most homes for sale in Denver, Colorado Springs, and Fort Collins receiving offers from multiple buyers you want to put in the best offer you can, whether it's a large down payment or an all-cash offer.
"A bridge loan is considered a very effective method to buy a new home before selling your present home."
There are two ways a bridge loan can be arranged. The first method is to use it to refinance up to seventy percent of your home's value (70 LTV) and payoff your first mortgage and then use the excess proceeds towards the new home. These proceeds help faciliate the purchase of the new home with a large down payment. Here's a couple examples below.
You can now use the $1.1 million towards the down payment on another primary home and repay the bridge loan once your home sells or you must refinance in 12 months, whichever comes first.
Additional Details. 1.) make the monthly payment as interest only 2.) have 12 payments collected at closing 3.) make no payment until your home is sold.
These three options depend on the value of your home and which bridge loan product in the table below you are best qualified for.
The second method relies on the value of two Colorado homes you own. Instead of using only the value of your existing home, you are provided a bridge loan that covers two residential properties you own. The new bridge loan will be cross-collateralized onto both properties.
Once your $2 million home is sold, you pay off the $1.65 million bridge loan or refinance out of the bridge loan before 12 months is up.
NOTE: If you want a bridge loan to be cross-collateralized the bridge loan must be $1,000,000 or more. This means your home's value must be $1,666,000 or higher because the maximum loan to value limit offered by a residential bridge lender is 60.
Unlike traditional mortgage products such as jumbo loans, bridge loans follow private lending guidelines that are often more flexible than non-conforming mortgages. This provides borrowers options tailored to their unique situations.
1. Your all-cash offer beats out competing buyer's offers with financing contingencies. 2. If you're not making an all-cash offer then your larger down payment is more attractive to the seller than a buyer with only a 10-or 15-percent down payment.3. Your debt to income ratios may exceed the guidelines of traditional banks but with bridge loan lender programs it's not a denial reason.
Bridge loans are structured and agreed upon to be paid off within 6 to 12 months. If you do not repay the bridge loan after one year there are no extensions. The lender may start the foreclosure process. If you believe your area has slow or declining sales it may be wise to look into some less costly and more stable alternative loans such as a HELOC.
We have more rental property bridge loans than owner-occupied financing on duplexes thru quadplexes, multifamily 5 or more units, mixed-use residential and commercial. Simply inquire for a custom quote.
Alternatives to Bridge Loans – Your best choices are a cash out refinance, Home Equity Loan, Asset Utilization Loan, or a No Ratio loan "before" the home is listed for sale.
This loan program is designed for borrowers who have equity and want funds quickly for a down payment or all-cash offer. Here’s who it helps the most:
We serve borrowers across the state of Colorado which includes the following cities and adjacent area:
Disclosure: Minimum loan amount is $200,000 for residential. Loan programs are subject to change per lender at any time until the loan is approved and the rate is locked. Borrowers must be approved by underwriting. Not all applicants will qualify.