Bridge Loans in CDM: Buy Before You Sell—Confidently

Found the right home in Corona Del Mar but haven’t sold yours yet? In a neighborhood where the best listings move fast, you need a way to act without rushing your sale or adding unnecessary risk. You want clarity on costs, timing, and how to structure a strong offer. This guide explains how bridge loans work, a provisional payment-fronting option through Compass, and step-by-step paths to buy before you sell in CDM. Let’s dive in.

Why buy-before-you-sell in CDM

Corona Del Mar is a high-demand, low-inventory coastal pocket of Newport Beach. Multiple-offer scenarios are common and sellers favor clean, non-contingent offers that can close quickly. Being able to buy first helps you secure the right home without fire-selling your current one.

What is a bridge loan

A bridge loan is short-term financing that lets you purchase a new home before your current home sells. It is usually secured by your current home and sometimes the new one. Most are interest-only for a short term, then repaid when your sale closes or by refinancing.

Key mechanics

• Advance against your home equity to fund a down payment or cover cash needs.
• Interest is typically higher than a standard mortgage and may be fixed or variable.
• Common terms run 6 to 12 months, with some programs targeting 3 to 6 months.
• Repayment usually happens at the sale of your current home or at the end of the term.
• The lender records a lien on the property, often in a junior position.

Pros and cons in CDM

• Pros: You can write a competitive, non-contingent offer, avoid panic pricing on your sale, and time your move smoothly.
• Cons: Higher financing cost than a standard mortgage, potential extension fees if your sale takes longer, and the temporary burden of carrying two homes.

What lenders look for

Lenders want to see healthy equity, strong credit, and a realistic exit plan. Expect to document your mortgages, income, bank statements, and a recent valuation on the home you’re selling. Many lenders will ask for proof your current home is listed or that you have a purchase contract on the new home.

Typical costs and fees

• Origination and administrative fees, plus appraisal and closing costs.
• Interest-only payments that can still add up over several months.
• Possible fees for early repayment, extensions, or conversion to a long-term loan.

Compass payment-fronting option (provisional)

Compass offers a payment-fronting option through a third-party partner that, for qualified clients, may advance up to six months of mortgage payments. Treat this as a program example that can change by market and over time. You should confirm all terms and availability for Corona Del Mar directly before relying on it in your plan.

What to verify before you proceed

• Availability in Orange County and eligible property types.
• Maximum duration and which payments are covered, such as principal and interest, taxes, insurance, and HOA.
• Qualification criteria, including minimum equity, credit score, and whether an active listing is required.
• Repayment mechanics from escrow, whether a lien is recorded, and all fees or interest applied.
• Required disclosures, documentation, and a sample term sheet.

Your step-by-step path

Buying first in CDM is a sequence. Lining up financing, timing escrow, and listing strategy all matter.

A. Buy first with a bridge loan or payment-fronting

1. Get prequalified and apply for a bridge loan or confirm eligibility for the payment-fronting option. Gather mortgage statements, title, income docs, and a valuation on your current home. Expect 1 to 2 weeks for conditional approval and a term sheet.

2. Make an offer on the new home. If your bridge financing is approved, you may be able to write non-contingent and include proof of funds or a lender letter to strengthen your position.

3. Open escrow on the purchase and list your current home for sale. In California, a 30 to 45 day escrow is common and can be negotiated.

4. Close the bridge loan to fund your down payment or cover payments on the home you are selling if using a payment-fronting structure.

5. Close on your sale and repay the bridge or fronted payments from proceeds. If your sale is delayed, discuss extensions or refinance options early.

B. Use a HELOC or home equity loan

A HELOC secured by your current home can fund your down payment or carry costs. It often has lower fees than a bridge loan but may come with a variable rate. Underwriting can take 2 to 6 weeks.

C. Non-financing alternatives

• Sale contingency. Protects you but is less competitive in CDM.
• Extended escrow. Align timelines so your purchase closes after your sale. Sellers may resist in a tight market.
• Rent-back agreements. Help match move-out and move-in dates when parties need flexibility.

Local factors in Orange County

• Jumbo financing is common in CDM due to high prices. Expect stricter underwriting, including reserves and lower debt-to-income ratios.
• Standard escrow practice in California coordinates loan payoffs through the title and escrow companies. Confirm the payoff flow for any bridge or fronted payments.
• Property taxes in California are based on the assessed value and a new base year starts when you purchase. Account for transfer taxes, HOA dues, and any special assessments. Coastal properties may require additional disclosures or flood insurance depending on lender requirements.

What to ask your lender and agent

• What equity, credit score, and reserves do I need for approval in a jumbo context?
• How will the bridge or fronting program show up in my debt-to-income calculation for the new loan?
• What is the exact term, extension policy, and fee schedule?
• Which payments are covered and how is repayment handled in escrow?
• Is a lien recorded, and in what position?
• What documents will you require and when do you need them?

Documents to gather early

• Current mortgage statements and payoff details.
• Recent appraisal or broker price opinion on the home you are selling.
• Purchase contract on the new home once accepted.
• Income documentation, including pay stubs, W-2s, tax returns, and bank statements.
• Title report for your current home.
• Listing agreement for the home you are selling if the lender requires it.

Risks to plan for

• Market time. If your sale takes longer than expected, carrying costs increase and extensions can be expensive.
• Cash flow. Even interest-only payments stack up alongside insurance, taxes, and HOA dues.
• Rate and underwriting shifts. Jumbo lending standards and rates can change. Lock plans and backup options with your lender.

Work with a deal maker

Buying first in CDM is doable when you control the variables. A clear financing plan, a disciplined listing strategy, and strong negotiation help you secure the right home without giving up value on your sale. The Carter Kaufman Group pairs local expertise with productized solutions, including Compass Concierge, bridge-financing pathways, and a negotiation-first approach so you can move with confidence. Ready to map your buy-first plan and timeline? Book an Appointment with the Carter Kaufman Group and Work With A Deal Maker®.

FAQs

How do bridge loans work when buying in Corona Del Mar?

• A bridge loan advances equity from your current home for a short term so you can purchase first, then it is typically repaid from your sale proceeds or a refinance.

How long do bridge loans usually last in Orange County?

• Many programs target 3 to 6 months, with some up to 12 months, and you should confirm the exact term and extension rules before applying.

Will a bridge loan affect qualifying for my new jumbo mortgage?

• Lenders consider the bridge in your debt-to-income ratio, though some structures are excluded if repaid at closing, so verify treatment with your underwriter early.

Does a bridge loan put a lien on my property?

• Most bridge loans are secured and recorded as a lien, often junior to the existing mortgage, which your escrow officer will coordinate for payoff.

What is the Compass payment-fronting option and is it available in CDM?

• It is a provisional program through a third-party partner that may advance up to six months of payments for qualified clients, and you should confirm current availability and terms in Orange County.

What are alternatives if I do not want a bridge loan?

• Consider a HELOC secured by your current home, an extended escrow, a sale contingency, or a rent-back agreement depending on market conditions and seller preferences.

Are bridge loan interest payments tax-deductible?

• Deductibility depends on tax law and how the loan is secured and used, so consult your CPA for advice on your specific situation.