Do you remember the old bridge loans?
It’s a term that been around for a long time. Well it seems it may good news for seller who would like to make a move to up-size or down-size their next home! In South Florida’s crazy real estate market, buyers need to move fast when they find a house they like. That can be a problem if they have a house they need to sell. Well the bridge loan is back with some lenders. While the details of a bridge loan vary by lender, they allow a homeowner to buy a new home before selling their current home. This may not be the best option for everyone, but having more options in todays housing market is always helpful to the consumer.
The bridge loans typically works for borrowers who have at least 20 percent equity in their current house and have the income & credit requirements met by the lender. A bridge loan, is designed to be a link, or bridge, between selling a borrower’s current home and purchasing their next home.
With many markets facing low housing inventory and buyers who are interested in buying a home need to make offers quickly to get their contract accepted. So now borrowers who already own a home can possibly eliminate a barrier to buying their next home and better compete in low inventory markets.
Details on some Bridge loans
- 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 are typically available for single-family homes that are primary residences.
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