Back to Home Page >
Back to Mortgage Articles
Bridge Mortgage Loans
What is a Bridge Loan?
Here's a quick scenario. You decide to start
"shopping" for a new home, with no real intent to
purchase immediately. You happen to come across
the perfect home and decide you're ready to make an
you have a problem -- you haven't put your existing home
on the market yet.
You go ahead and put a contingent
offer on this perfect home, but the seller denies it or
another buyer without a contingency also makes an offer.
You don't want to lose this perfect home, but don't know
what to do?
With today's real estate "sellers market", many home
builders and sellers will not agree to a purchase
contract that includes a contingent offer (or they will
have an easy out of the contract if they find another
buyer who does not have a contingency in his/her
contract). Many real estate agents and mortgage
professionals will recommend a bridge mortgage loan. The
bridge loan is a secondary mortgage on your existing
home that can be used as a down payment on the new home.
It is paid off when your existing home sells.
Apply Now for a Bridge Loan or
Home Equity Line of Credit!
Should I Apply for a Bridge Loan? It depends on
how badly you want the new home. If it is indeed the
perfect home, you'll should proceed with getting a
bridge loan. Since bridge loans are considered slightly
more risky (and lenders know that you're in a bind!),
the prices are a little higher. If the home isn't really
the "perfect" home, you might just let it go and be
prepared for the next home. Apply
Now for a Bridge Loan or Home Equity Line of Credit!
Bridge Loan Alternatives
One low cost alternative to a bridge loan is a home
equity line of credit. When applying for a home equity
line of credit, also know as a HELOC, lenders will ask
you what you intend to do with the line of credit
proceeds. You can give a generic answer like "home
improvements". The majority of lenders will not check
after the line is approved and opened and you can spend
the money on anything you want (including making a down
payment on a new home). You are given a checkbook or
credit card to use to advance payments from your HELOC.
The nice thing is that home equity credit lines are
generally significantly lower priced and have better
rates than bridge loans. A HELOC is a great alternative
to a bridge loan. Apply Now for a
Bridge Loan or Home Equity Line of Credit!