Real estate agents, investors, home buyers and home sellers are always interested in utilizing smart home buying strategies.
A bridge loan is a type of creative financing that falls into the category of “smart home buying strategies”. It is a short term loan, 12 to 18 months only. It gets paid off with longer-term financing sometime in the near future, or from the sale of the property. As the name implies, it provides a bridge from one transaction to the next.
#1. A Bridge loan is sometimes considered a cash purchase by Listing Agents.
#2. The Buyer does not need a contingency clause in the purchase offer of their new home.
#3. A home owner can buy a new house now and sell their present home later.
#4. There is no fear of losing their dream home because they have not sold their present home.
#5.Your buyer can buy a fixer, renovate it and have their dream home. Hard money bridge loans are often the solution for less than perfect properties.
#6. Speed. These loans can usually close in less than a week.
Typically, bridge loans are sought when another sale is pending and the funds are needed to close the final deal. At other times, a buyer may be in a “fire sale” situation, where the seller on the other end of the transaction must close a deal within a specified period of time.
Some instances when you might use a Bridge Loan are:
- Pulling some cash out of the equity in your current home to secure a down payment to purchase another home. This allows you more time to sell your present home.
- Refinancing the property you are selling to pay cash for the new home.
Rates and costs for Bridge Loans can vary by Lender. Rates range between *9-12% and are usually interest only. Rates depend on the amount of the down payment so the bigger the down, the lower the interest rate.
How We Can Help You:
We are licensed for the state of California and have been in business for 29 years.
Call our office at 707-523-2099 and within just a few minutes, we can let you know what we can do for you!
You can also find all the programs we offer on our website at www.SunPacificMortgage.com
We hope this has helped you understand more about what a Bridge loan is and how we can be of assistance.
Best, Forest & Ken – The Guys in the White Hats
Sun Pacific Mortgage & Real Estate ● 707-523-2099
See full article here: http://www.sunpacificmortgage.com/blogs/bridge-loan-beneficial/
*APR: Assuming a $200,000 loan amount, APR’s will range from 9.5% - 12.5%