For luxury home buyers, the most common obstacle isn’t finding the perfect property—it’s timing the liquidity. Bridging the financial gaps that may cost you your dream home is a challenge that traditional banking often fails to solve.
As a premier luxury bridge lender, Capital Funding provides the agile capital necessary to secure high-end real estate without the red tape. While traditional mortgages lack the flexibility required to manage simultaneous transactions, a bridge loan from a hard money lender offers a streamlined path to your next investment.
A bridge loan, also known as interim financing, is a short-term loan that provides immediate cash flow to help you purchase a home while waiting for your existing property to sell. It essentially “bridges” the gap between selling your current residence and closing on a new one.1
In the world of high-end real estate, this is a temporary financing option allowing for rapid access to funds with a repayment plan typically structured 2within one year. Because it is secured by the equity in your existing property, it allows for a much faster underwriting process than a standard jumbo loan.
This is especially helpful in competitive markets where multiple buyers are vying for the same property. By partnering with an experienced luxury bridge lender, you can make a strong, non-contingent offer that gives you a distinct advantage over other prospective buyers.
While bridge loans are versatile, they are particularly advantageous for the luxury market where deal complexity and high valuations are the norms.
The primary advantage of a bridge loan is the speed of execution. Traditional lenders can take months to approve a loan. Conversely, a bridge loan lender can often approve and fund a deal in a matter of days, ensuring you don’t lose a property to a faster bidder.
Bridge loans allow you to purchase your dream home without being forced to sell your current property first. This “gap financing” ensures you don’t have to move into a rental or settle for a subpar property while waiting for your old house to close.
When dealing with luxury or jumbo-priced homes, the sheer volume of capital required makes timing tricky. Sellers prioritize offers with the fewest contingencies. By removing the “sale of home” contingency, your offer becomes as attractive as a cash bid.
Luxury homes are rarely “turnkey” to a buyer’s specific taste. Whether it’s interior decor, smart-home utilities, or structural layout changes, a bridge loan can supply the necessary funds to cover renovation costs before you even move in.
In some cases, a bridge loan can consolidate existing debts—including the mortgage on your current property—into a single, manageable loan. This simplifies your financial profile during the transition period.
While a luxury bridge lender like Capital Funding offers more flexibility than a bank, there are still key factors we evaluate:
Sufficient Equity: Borrowers generally need significant equity in their current property (typically 20%-30%) to secure the loan.
Strong Credit History: While we are more flexible than banks, a solid credit history demonstrates your ability to manage the exit strategy.
Debt-to-Income (DTI) Ratio: We look at your ability to manage the interim debt, though we can often look past the strict DTI limits that trigger automatic rejections at big banks.
Clear Exit Strategy: Every bridge loan needs a finish line. This is usually the sale of the existing property or a long-term refinance once the new home is secured.
Hard money loans—secured by real estate and funded by private capital—are a tailor-made solution for luxury buyers. Unlike banks, we focus on the value of the asset rather than just your tax returns.
24-Hour Approvals: At Capital Funding, we can provide approval in as little as 24 hours.
Flexible Criteria: We aren’t constrained by the heavy regulatory restrictions of credit unions or national banks. This allows us to fund deals for borrowers with complex income streams or non-traditional financial structures.
Customized Terms: Every luxury transaction is unique. We fine-tune our loan terms to meet your specific timeline and requirements.
Because bridge loans are short-term and carry higher immediate risk for the lender, interest rates are typically higher than 30-year conventional mortgages.
Interest rates generally range from 9% to 12% or higher, depending on the specifics of the collateral and the borrower’s profile. You should also account for origination fees, appraisal costs, and closing fees. However, most luxury buyers find that the cost of the loan is a small price to pay for the ability to secure a multi-million dollar property that would otherwise be lost.
A bridge loan is the ultimate tool for the sophisticated real estate investor or homeowner. Whether you want to make a cash-equivalent offer, fund renovations, or simply bridge the gap between two closings, Capital Funding is here to help.
As a dedicated luxury bridge lender, we act as your investment partner. We set our own guidelines to ensure the deal makes sense for you.
Contact Capital Funding today to discuss your luxury financing needs and get a quote on your bridge loan.
