Nobody wants to carry two mortgages on two homes at the same time. Sometimes, however, an overlap between buying a new home and selling the old one occurs. A bridge loan (also, "gap" or "swing" loan) can defeat the blockade, take the pressure off the monthly budget and provide down payment money that will make everything move along more smoothly.
- Know what to expect. A bridge loan is a short-term loan for which the equity in your old home (and sometimes in your new one) serves as collateral. Various lenders charge different interest rates - often 1 or 2 percentage points above the current prime rate, or a bit higher than the current regular mortgage rate. Depending on lender's requirements (appraisal, title search, etc.), closing costs can be anywhere from 0.5% to 1.5% of the loan amount.
- Pay off when you sell. You may pay the loan off when you sell your home, or in monthly or quarterly installments. If your home does not sell within the specified term (often 6 months or a year), the loan is usually renewable.
Bridge loans are only one of the many tricks in our bag to help you smooth your move. If you're planning to move soon, please feel free to contact me.
Please feel free to look at these free no obligation E Reports on relocating
SHIPPING: Should You Send It, Carry It Or Leave It Behind?
INSPECTIONS: Smart Strategies To Make A Home Inspection Work For You
PETS TO GO: Plan A Safe, Comfortable Move For Your Pets
TIMING: Seven Buying And Selling Secrets To Know Before You Relocate
HOME SEARCH 101: Tips For Locating The Right Schools
FAMILY MOVE: Tips For House Hunting With The Kids
LINGO 101: Money-Saving Glossary To Key Moving Terms
STRESS BUSTERS: How To Minimize The Worries Of Moving
SMOOTH: A Dozen Ways To Plan The Perfect Relocation
RESALES: Hidden Advantages Of Previously Owned Homes
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