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 When relocating, many
homeowners are faced with the dilemma of finding the perfect home yet also
having their current home to sell. This puts you in the position of giving
up their dream home until they sell their present home. There is another option that you may want to consider called a bridge loan. A bridge loan allows you to tap into the equity in your current home to provide the downpayment on your new home. The money from your bridge loan is paid back once you致e sold your current home. Lenders will generally treat a bridge loan like a personal loan. Bridge loans are generally short-term financing and held by the lender, rather than being sold to the secondary market like most other mortgage products. The disbursement of the bridge loan will generally take place at the closing of your new home. Like most mortgage products, bridge loans have varying terms, fees and flexibility depending on the lender. The repayment schedule tends to be more flexible than a regular mortgage by offering such options as monthly payments, quarterly interest payments and some will defer all payments until the current property is sold. |
Although there are many advantages to obtaining a bridge loan, you値l need
to examine the downside in order to determine whether or not a bridge loan
is for you. Here are some points to consider. Estimated Selling Time Your first task is find out from your Realtor how long they estimate it will take your home to sell. Once you have an optimistic time frame and the conservative time frame, you値l be able to budget accordingly. Duplicate House Payments The next step to your budgeting is to find out how many months you値l be expected to make the house payment on your current home and the house payment on your new home. This may not be as severe as you think. For instance, if you settle on your new home Jan. 1, 2000, your first payment on your new home may not be due until March 1, 2000. If your house was on the market and sells in February yet closes in March of 2000, you値l only be making two house payments in the month of March. If this is the case, make sure you致e set aside enough savings to cover duplicate months. With a little bit of planning, the bridge loan may be the perfect solution to building or buying the home of your dreams. As your Mortgage Planner, I知 always available to help, so please do not hesitate to call me. |
