Are you in the process of selling your home? You probably want to buy a new one right now to ensure you have another house to move into, but what happens if you do not have the cash to buy a home right now? You might need to cash from your current home before you can purchase your next home, but can you really wait to sell your house before buying another one? A bridge loan can help you fix this issue. What is a bridge loan, and how does it work?
What Is A Bridge Loan?
A bridge loan has been specifically designed to let you tap into the equity you have in your current home and use that equity to buy another house. Essentially, you will borrow against the equity in your home, giving you the cash you need to buy your next house. Then, when you sell your current house, you will use the cash from the sale to pay off the bridge loan. That way, you don’t have to worry about selling your current house before you can buy your next one.
How Does The Repayment Process Work?
Like any other loan, you will have to make regular payments on the bridge loan even before you sell your current house. On the other hand, you might not have to pay down any of the principle until your sell your first home. Generally, you need to pay back the loan in a few months, and there is typically a balloon payment at the end that you pay when you sell your house.
Is It Right For Me?
Generally, you should consider getting a bridge loan if you need more flexibility when buying a house. Keep in mind that the loan will come with a slightly higher interest rate when compared to a mortgage, but it could make it easier for you to buy your next home.
Consider Getting A Bridge Loan If You Are Buying A Selling A House
If you are looking for some additional flexibility during the buying process, a bridge loan could help you. You should think carefully about whether you can qualify for a bridge loan and whether it is right for you. Consider reaching out to an expert who can help you.
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About the Author:
Babak Moghaddam graduated from University of Southern California in 1985. He entered the mortgage industry as a compliance auditor at the Bank of New York in 1986 and completed his masters in Business Administration two years later. After seventeen years in the traditional mortgage banking world Babak finally transformed this vision into his own practice in 2002 when he formed Charter Pacific Lending Corp, a mortgage company that has provided over $900 Million in residential real estate loans throughout Southern California. Babak and his team do things a little differently than other mortgage providers. They work as financial advisors, because they have come to realize that a mortgage is a very powerful financial tool. And just like any other financial tool, it should be managed as part of the overall financial management plan to reach every home owner’s long and short-term financial goals much faster. You can contact Babak for a free consultation and strategy session at (800) 322-1217 X103.