What is the difference between a bridge loan and a conventional mortgage?

A conventional mortgage is a long-term bank loan underwritten on your income, credit, and the property; the industry standard close is 30 days, and MyBridge Loans can close a clean file in about two weeks. A bridge loan is a short-term private money loan underwritten on the property and the exit, closing in about two weeks. The bridge costs more and is meant to be paid off by a sale or by a conventional refinance.

Is a bridge loan a bad deal because the rate is higher?

Not when the alternative is losing the property or the deal. The rate is the price of closing on time or closing at all. Most bridge borrowers refinance into a conventional loan within a year or two, so the higher rate runs for months, not decades.

Can I get a bridge loan and then a conventional mortgage from the same broker?

Yes. MyBridge Loans funds the bridge through private investors and brokers the conventional take-out loan in California. Same person on both ends, so the exit is planned before the bridge funds.

When should I just wait for the conventional loan?

When your income and credit qualify and the property is standard. Through MyBridge Loans a clean conventional file closes in about two weeks, so if the bank will say yes, take the bank. The bridge is for when the bank will not say yes, or not in time.

Bridge loan vs conventional mortgage

A conventional mortgage is cheap and underwritten on you. A bridge loan costs more and is underwritten on the property. Through MyBridge Loans a clean conventional file can close in about two weeks, the same as a bridge; the industry standard is 30 days. So the real difference is usually who qualifies, not speed. They are not competitors. Most borrowers who use a bridge loan do so to close now, then refinance into a conventional mortgage later. MyBridge Loans funds bridge loans directly and brokers conventional mortgages in California, so the plan covers both ends.

Side by side

	Conventional mortgage	Bridge loan
Funded by	A bank or agency lender	Private investors through MyBridge Loans
Underwritten on	Income, FICO, debt-to-income, assets, and the property	The property's equity and the exit. No minimum FICO, no income documentation.
Time to close	About two weeks through MyBridge Loans on a clean file; industry standard is 30 days	About two weeks
Term	15 or 30 years	3-year note, usually paid off in 6 to 24 months
Rate	Market rate, fixed or adjustable	9.5% to 10.99% and up on a 1st, interest-only
Max loan-to-value	80% to 97% depending on program	65% on a 1st; cross other property to go higher
Property condition	Must meet lender standards	Completed property; condition priced into value
Who it fits	W-2 or well-documented income, good credit, standard property, no deadline	Self-employed, foreign national, recent credit event, non-standard property, tight deadline, or buying before selling

When the bank is the right answer

When your income documents, your credit is clean, and the property is the kind banks like. A conventional mortgage is the cheapest money available on real estate, and through MyBridge Loans a clean file closes in about two weeks. If the bank will say yes, take it. MyBridge Loans brokers conventional, FHA, VA, and non-QM loans in California and will tell you if that is the better path.

When the bridge is the right answer

The closing date the bank cannot meet. A purchase contract with a seven-day close, an auction, or a file with a condition that will not clear in time.
Buying before selling. You found the next house before the current one closed. A bridge funds the purchase, often crossed with the house you are selling, and pays off when it sells. See cross-collateral purchases.
The file the bank declined. Self-employed with income that does not document, FICO below the floor, a credit event in the last few years, or an entity or foreign national borrower. See after a decline.
The property the bank will not touch. Mixed use, non-warrantable condo, condition issues, unusual zoning, or a probate or trust vesting.
No seasoning. You just took title, just received the down payment, or just inherited the property, and the bank wants to wait.

How borrowers use both

Fund the purchase or the cash-out with a bridge loan now. Fix the thing that kept the bank away: file the tax return, let the credit event age, finish the repairs, season the title. Then refinance into a conventional mortgage. The bridge runs for months; the conventional loan runs for decades. The cost of the bridge is the cost of the months you did not have to wait. MyBridge Loans plans the take-out before the bridge funds, and in California can broker the conventional loan itself.

The math

A $700,000 bridge at 10% interest-only costs about $5,833 a month. If the alternative is losing a $1,000,000 purchase with $200,000 of built-in equity, or paying a seller's default, twelve months of bridge interest is roughly $70,000 against a $200,000 position. If the alternative is a conventional loan that will close on time, the bridge costs $70,000 for no reason. The bridge is a tool for when waiting has a price.

Get an answer on both

Send the address, value, loan amount, FICO, occupancy, timeline, and what you are trying to do to the scenario form, or call 949-463-9898. You get a same-day answer on whether this is a bank loan, a bridge, or a bridge now and a bank loan later.