The bridge loan is back!. While the details of a bridge loan vary by lender, they allow a homeowner to buy a new home before selling their current home. A type of loan not being offered by many lenders today, since before the Great Recession.
A bridge loan, is designed to be a link, or bridge, between selling a borrower’s current home and purchasing their next home. In some cases, depending on lender, borrower’s existing home payment is eliminated so they only have one payment while they sell their current home. This could be a great loan option for homeowners in need to sell quick due to job relocation, Move Up opportunity and Life Changes just to name a few.
With many markets facing low housing inventory, borrowers who are interested in buying a home need to act fast to have their bid accepted. By using our bridge loan, borrowers who already own a home can eliminate a barrier to buying their next home and better compete in low inventory markets.
A Bridge Loan will very depending on the lender, but below you will find some of the most common advantages.
- Borrowers can use the equity in their current home for the downpayment on their new home.
- No principal or interest payments on the bridge loan are required for up to 12 months while the current home is being sold.
- There are no application fees, cancellation fees or prepayment penalties.
- The bridge loan is available for single-family homes, planned unit developments and condominiums that are primary residences.
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