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How Long Does It Take to Get a Bridge Loan?
In the real estate investment game, timing can make or break a deal. Waiting on traditional bank financing can result in missed opportunities or delayed purchases.
Bridge loans offer a speedy alternative, as lenders can pre-approve, analyze, underwrite, and fund deals in just a few days.
So, how quickly can you actually secure approval and funding for your real estate project?
Let’s walk through the typical bridge loan timeline and what you can expect at each stage.
Bridge Loan Timeline
The most desirable feature of a bridge loan is its speed. Lenders can approve these types of loans in a matter of days, versus bank loans that can take months.
Let’s go over a typical timeline for obtaining bridge loan financing, which can vary on a case-by-case basis.
Pre-Approval: Day 1
- Starts quickly: a 5 to 10-minute phone call or a quick online application.
- Provide basic details: Collateral property’s address and present value, the loan amount, your financial background, and past real estate experience.
- Pre-approval decision: Based on this initial information, the lender can often give you a tentative yes or no on the spot.
Note: Pre-approval is preliminary. It does not guarantee final loan approval and should be viewed more as a sign of interest from the lender and your likelihood of qualifying before completing full underwriting, which is a more time-consuming process.
Collateral Analysis: Days 2 to 3
The lender evaluates the collateral property to ensure the loan aligns with its market value.
This establishes the loan-to-value (LTV) ratio, often the most important factor in determining approval and interest rates for bridge loans.
A lower LTV indicates the borrower has more equity in the property, which translates into lower risk for the lender, often equating to better loan terms or lower interest rates.
Conversely, a higher LTV indicates greater leverage and signals increased risk, which has a direct impact on both loan approval and pricing.
Most bridge lenders typically cap LTVs between 65% and 75%, depending on the property type and location, borrower’s financial strength, and a concrete exit strategy.
This analysis usually takes 1 to 2 business days, depending on the valuation method and property type. During this time, the lender may also review other aspects of the deal and follow up with additional questions before moving forward.
Underwriting: Days 3 to 5
During underwriting, the lender performs a detailed review of both the property and the borrower to determine final loan eligibility:
- Property review: The lender may conduct a site visit to verify the condition and value.
- Loan-to-value assessment: Confirms the property’s market value relative to the requested loan amount.
- Finalizing terms: The loan terms, including the interest rate, fees, and repayment schedule, are confirmed and agreed upon.
Underwriting typically takes 1 to 2 business days, depending on the property's complexity and the borrower's documentation.
Funding: Days 5 to 7
Once underwriting is complete and all conditions are met, the loan moves onto the funding stage:
- Closing the loan: The lender and borrower finalize all paperwork, including the promissory note, mortgage, and any other required documents.
- Disbursement of funds: The loan amount is wired either directly to the borrower or to the escrow account handling the property transaction.
- Timing: Funding typically occurs within 1 to 2 business days of initiating the process, depending on the complexity of the deal and the efficiency of the title and escrow processes.
At this stage, the borrower has access to the necessary capital to purchase, renovate, or refinance the property, enabling the deal to proceed quickly.
Tips to Secure a Bridge Loan Quickly
Have Essential Information Ready
Clear communication and strong organization can dramatically speed up the funding process.
No universal checklist for securing a bridge loan exists, and each lender has their own criteria.
But borrowers who keep all documents ready in digital format can demonstrate professionalism, giving their deals the best chance of fast approval and funding.
Here are some documents to have ready before applying for a bridge loan:
- Purchase contract
- Property address
- Loan amount
- Rent roll
- Intended use of funds
- Repayment plan for the lender
- Appraisal or, at a minimum, an estimated fair market value
Bridge lenders vary in the documents they require from borrowers, but for a comprehensive list of the most frequently requested documents, refer to our guide.
Prepare an Exit Strategy
Lenders want a clear understanding of how the borrower will repay the bridge loan before committing funds.
If the borrower lacks a well-defined repayment plan, lenders will view the deal as risky, causing hesitation in moving forward.
Borrowers need to articulate how they plan to repay the loan. Selling the property, refinancing with a bank loan, or using outside funds are the best and most common practices.
Having a realistic and solid exit strategy is an easy way to strengthen your credibility with the lender and increase your likelihood of approval.
Show Proof of Equity
To qualify for a bridge loan, lenders need assurance that you have sufficient equity in your property or other assets. Providing recent mortgage statements and a clean title demonstrates your financial stake and helps establish your loan-to-value (LTV) ratio.
Lenders may also request additional documentation, such as:
- Bank statements showing cash reserves
- Appraisal reports verifying the current property value
- Records of other owned properties
Having these documents ready not only speeds up the approval process but also shows that you are a prepared and reliable borrower, increasing your chances of securing favorable terms.
Handpicked Resources
Bridge Loans Guide Areas Served
San Diego Bridge Loans Bridge Loans
How to Qualify for a Bridge Loan? Areas Served
Los Angeles Bridge Loans Bridge Loans
What is a Hard Money Bridge Loan? Bridge Loans
California Bridge Lenders
About the Author
Russell Barneson Hard Money Lending
Russell is a seasoned real estate investor, writer, and hard money lending strategist, as well as the co-founder of Crescent Lenders. He holds a degree from the University of Southern California’s Marshall School of Business. Outside of work, Russell enjoys surfing and spending time outdoors with his dog, Amy.