Typically when you buy a new home the rule of the thumb is that you sell your current home and use the proceeds to pay for the down payment of your new home. Unfortunately, it does not work out that way for many people. They may need to purchase another home quickly for many reasons like an impromptu job offer or a new addition to the family.
The speed of the housing market can pose a challenge for many homeowners and they have to make quick decisions when it comes to buying their dream home. This may include purchasing their new home with a different closing date then their current home.
This is when a mortgage bridge loan is the right solution that can help you bridge the gap between selling your old home and buying a new one. Let us look at how bridge loans work, who can qualify for one and how to use it effectively.
To qualify for a bridge loan you must have a strong credit history and if you have some credit issues then you may need to seek private lending options. Secondly, to be approved for a bridge loan, a firm sale of your current home is also a must. Lastly, your lawyer must provide an undertaking to register the mortgage if things go wrong with the closing of your old home.
TIPS FOR USING A BRIDGE LOAN EFFECTIVELY
Like any other home loan, a bridge loan is also debt and it comes with risks. One of the risks is that the home you are trying to sell is not getting offers and you are forced to make two mortgage payments for a long period.
The following tips will help you make the most of this financial option. Before you sign up for a bridge loan, make sure:
Knowing these things will help you decide if a bridge loan is right for you. Another key to using a bridge loan effectively is to make sure that you have partnered with the right lender. Few banks offer bridge mortgage loans as they tend to be niche products. So shopping around to find a lender is good advice as there is a great deal of flexibility in what different lenders offer. Not all lenders require a particular debt-to-income ratio or a minimum FICO score. However, make sure to ask about terms and fees.
Contact (877) 877 7575 our mortgage specialists to see if a bridge loan is right for you or if other options meet your financial needs better.
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Registered New York Mortgage Broker – All mortgage loans arranged with third party providers.
Figure: 7 TAC §80.200(b)
“consumers wishing to file a complaint against a company or a residential mortgage loan originator should complete and send a complaint form to the texas department of savings and mortgage lending, 2601 north lamar, suite 201, austin, texas 78705. complaint forms and instructions may be obtained from the department’s website at www.sml.texas.gov. a toll-free consumer hotline is available at 1-877-276-5550. the department maintains a recovery fund to make payments of certain actual out of pocket damages sustained by borrowers caused by acts of licensed residential mortgage loan originators. a written application for reimbursement from the recovery fund must be filed with and investigated by the department prior to the payment of a claim. for more information about the recovery fund, please consult the department’s website at www.sml.texas.gov.”