Want to buy your next Issaquah home before your current one sells? You are not alone. In fast-moving Eastside markets, timing can make or break your plan, and living through showings while searching is no one’s idea of smooth. In this guide, you will learn how bridge loans work, what they cost, the risks and benefits, alternatives, and a clear step-by-step plan tailored to Issaquah and King County. Let’s dive in.
What a bridge loan is
A bridge loan is short-term financing that helps you buy a new home before your current home sells. It typically uses your existing home’s equity to fund all or part of the down payment and closing on the new purchase. Most bridge loans run for a few months up to a year and are often interest-only.
You might consider a bridge loan if you want to make a non-contingent offer, you have a tight move timeline, or you want to avoid temporary housing. Repayment usually happens when your current home closes and sale proceeds pay off the bridge loan, or when you refinance into a permanent mortgage.
How bridge loans work in Issaquah
Lenders look closely at your equity, credit, income, and debts. Many will review the combined obligations across your current mortgage, the bridge loan, and the new loan. Expect an appraisal or broker price opinion on the home used as collateral.
You will be asked for recent mortgage statements, payoff information, proof of income, credit history, and sometimes a listing agreement or proof you intend to sell. Some lenders allow the bridge loan as a second lien. Others require different lien positions depending on your existing mortgage.
Processing often takes 1 to 4 weeks. In King County, title and escrow coordination is essential so the bridge payoff happens correctly when your sale closes. Washington also imposes a real estate excise tax on sales, which impacts your net proceeds and the timing of funds used to repay the bridge. Plan this sequencing with your lender, escrow, and agent.
Costs, benefits, and risks
Bridge financing trades speed and flexibility for higher short-term costs. Go in eyes open.
Costs to budget:
- Interest that is often higher than a long-term mortgage.
- Origination and lender fees.
- Appraisal, title, and closing costs.
- Possible prepayment or extension fees. Confirm terms in writing.
Benefits you may value:
- Stronger offers without a sale contingency.
- Fewer logistical hurdles with moving and showings.
- A smoother transition for your household.
Risks to weigh:
- Higher total cost due to short-term interest and fees.
- Carrying two mortgages if your current home does not sell quickly.
- If your sale takes longer than the loan term, you may need to extend, refinance, or adjust pricing to sell.
- Missed payments can impact credit and risk foreclosure.
Is a bridge loan right for Issaquah buyers?
Consider how quickly homes like yours are selling and how competitive your target price point is. Puget Sound activity often varies by season, which can influence days on market and your carrying risk. Think about your available equity, monthly cash flow, and how comfortable you are paying short-term premiums for a stronger purchase position.
If your current home is well positioned to sell with strong marketing, your payoff timeline is clearer. If your home needs work before listing, plan how to accelerate that preparation without delaying your new purchase.
Alternatives to bridge financing
Before you commit, compare these options:
Contingent offer
- Pro: Lower financial risk while you wait to sell.
- Con: Weaker in competitive situations.
HELOC or home equity loan
- Pro: Often faster and less expensive than a bridge.
- Con: Reduces available equity and requires qualifying.
Cash or liquid savings
- Pro: Lowest cost and simplest.
- Con: Not feasible for most buyers.
Cash-out refinance on your current home
- Pro: Converts equity into cash before you buy.
- Con: Longer process and can increase your long-term mortgage costs.
Seller rent-back or leaseback
- Pro: Lets you close on your sale and stay briefly while you buy.
- Con: Requires buyer agreement and careful contract terms.
Bridge that converts to a permanent mortgage
- Pro: One path from short-term to long-term financing.
- Con: Terms vary. Confirm fees and timing details.
A simple step-by-step plan
Meet with a local agent for a current market valuation and listing strategy for your existing home.
Speak with 2 to 3 lenders or brokers about bridge options, timing, and fees. Ask for written estimates with sample payoff scenarios.
Map your cash flow. Include interest, lender fees, and the cost of carrying two homes longer than expected.
Decide how you will write your purchase offer. Consider whether going non-contingent or adding a seller rent-back makes sense.
If moving forward, apply for the bridge loan, provide documents, and coordinate appraisal and title.
Close on the new home, then list and actively market your current home quickly.
When your sale closes, use proceeds to pay off the bridge and confirm payoff through your lender and escrow.
Questions to ask every bridge lender
- Is the loan interest-only or amortizing?
- What is the exact term and can I extend if needed?
- What are all fees, including origination, appraisal, title, and any extension or prepayment costs?
- How and when is the loan repaid? Will sale proceeds, a refinance, or a conversion be used?
- If my home does not sell by maturity, what are the options and costs to extend?
- Will you subordinate to my current mortgage if needed? How will payoffs be handled?
- Do you offer a conversion to a permanent mortgage to avoid double-closing costs?
A hypothetical Issaquah scenario
Imagine you want to buy in Issaquah while your current home is being prepared for market. You secure a short-term, interest-only bridge loan using your home’s equity. You close on the new home, move in, and your agent lists your current home with strong pricing, staging, and marketing. The home sells within the bridge term. Sale proceeds pay off the bridge loan at closing, and you continue with your new long-term mortgage.
If the sale takes longer, you work with your lender on an extension or consider refinancing the bridge. You and your agent revisit pricing, marketing exposure, and showing feedback to accelerate the sale while you manage carrying costs.
Timing and coordination matter in King County
Appraisal schedules and escrow timelines can influence your closing dates, so build in a buffer from the start. Your title company will coordinate lien positions, payoffs, and recording. Washington’s excise tax on real estate sales affects your net proceeds, so confirm those estimates early with your agent and closing team.
How Six Degrees Team helps you move smoothly
Buying before you sell takes planning. Six Degrees Team coordinates the moving parts so you can focus on the right next home. The team pairs valuation and timing strategy with design-led staging and a concierge program that fronts pre-listing renovation and staging costs interest-free, then manages contractors for you. This helps you bring your current home to market fast and strong while you shop with confidence.
You also get data-informed pricing guidance, video-first marketing, and full transaction management from offer to escrow. Need introductions to local lenders or title partners? The team maintains a vetted network and can help you compare options. When you are ready, reach out to discuss your goals and timing.
Ready to explore your plan? Connect with the Six Degrees Team to map your strategy.
FAQs
How long do bridge loans typically last?
- Most are short-term, often several months. Ask each lender for the exact term and any extension policy.
Will I pay two mortgages if I use a bridge loan?
- Possibly. If your current home does not sell right away, plan for carrying both payments plus bridge interest and fees.
Are bridge loans expensive compared to regular mortgages?
- Yes. They usually have higher interest and fees because they are short-term and higher risk for lenders. Your total cost depends on the loan’s terms and duration.
Do all lenders in Issaquah offer bridge loans?
- No. Some community banks, credit unions, mortgage brokers, and specialty lenders do. Many large banks focus on HELOCs instead of bridge products.
What happens if my home does not sell before the bridge matures?
- You may extend the loan, refinance, convert to a longer-term loan, or adjust pricing to sell. Each option has costs, so discuss scenarios with your lender early.
Will a bridge loan make my offer stronger?
- It can. Removing a sale contingency and showing proof of funds often improves offer strength, though sellers consider many factors beyond financing.
