How Can You Secure Your New Home BEFORE Selling Your Current Home?
We recently sat down with Phoebe Jaeckels of Movement Mortgage to get all the details about bridge loan products. With such low inventory, many sellers are afraid to sell their home before finding their next home which perpetuates the problem. However a bridge loan can be an elegant solution that allows you to secure your dream home before selling your current home. Thank you to Phoebe for sharing this fantastic info!
Bridge loans are a fascinating financial tool, particularly useful in real estate transactions. These loans act as an interim financing option for individuals or businesses waiting for long-term financing to come through or for an existing obligation to be cleared.
Take, for example, the "NEW Bridge Loan" detailed in the accompanying advertisement. This loan offers a ZERO percent interest rate, making it a highly attractive option for borrowers. They can secure loan amounts up to $500,000, which is a substantial sum for covering immediate real estate costs.
An intriguing aspect of this loan is that there are no payment dues required from the borrower. Instead, the current PITI (Principal, Interest, Taxes, and Insurance) is paid monthly by the bridge loan itself. This feature can significantly alleviate financial stress on the borrower, who may still be responsible for the PITI on their current home.
Borrowers are given a six-month period to sell their departure home, which is a relatively generous amount of time to complete a sale without rushing. In addition, up to $35,000 of the loan can be used specifically to fix up or stage the home for sale. This earmarked money can potentially increase the home’s market value and help it sell faster, benefiting both the borrower and the lender.
Perhaps the "BEST PART" of this bridge loan, as the advertisement exclaims, is the flexibility it offers in purchasing a new home. Clients can go ahead and purchase their new home with no contingencies and close the deal before the sale of their current home is finalized. This advantage cannot be overstated, as it allows for a seamless transition between properties, which is often a significant hurdle in real estate transactions.
Of course, while the terms are attractive, borrowers must qualify at closing for all benefits, and the availability of these loans might change over time. Potential borrowers are advised to check the current terms and ensure they understand the full implications of entering into such an agreement. With any financial product, the fine print is crucial — interest rates and products are subject to change, and additional information would be available at the loan issuer's legal section.
The bridge loan detailed here represents a potentially powerful option for homeowners looking to transition between properties. With its significant loan limit, absence of immediate repayments, and facilitation of a smooth property transition, it addresses several of the challenges that come with buying and selling real estate concurrently.
