With rates on the move and home values setting records in neighborhoods across America, you know it’s a crazy market out there. So if you’re home shopping and you find the house of your dreams BUT you haven’t sold your home yet—what are your options? Here’s a way to use your existing home’s available equity if you’re short on down payment funds for your new home...
Bridge Loans are a secret weapon for homeowners shopping for a new home
Many homeowners looking to purchase a home—but who haven't sold the home they currently own—are learning more about bridge loans. Just what is a bridge loan?
A bridge loan is short-term loan that accesses your current home's available equity to "bridge the gap" between buying your new home and selling your current one. Here's how they work...
The loan allows you to access your current home’s available equity to use as a down payment on your new home. Then when your home sells, you pay off the bridge loan in full. One huge plus of a bridge loan? You can avoid offer contingencies in today’s hyper-competitive real estate market where in some areas, many homes are being sold for above asking price and sellers often see all-cash offers.
Bridge Loan terms can vary, but most bridge loans last from six months to just under a year.
At Spring EQ, we offer an 11-month interest-only, fixed-rate loan that allows you to borrow between $75,000 and $500,000 of your home’s value while it’s for sale and use the funds toward the purchase of your new home. Once your home sells, you can pay off the bridge loan balance. It’s a great way to shop with confidence in a market as competitive as this.
How does it work?
A bridge loan generally has the same requirements of a standard home loan, but is used on a short-term, transitional basis only. Speak to one of our loan experts to get all your questions answered. These temporary funds are meant to “bridge” the gap between selling one home and buying another. At Spring EQ, a bridge loan lets you borrow up to 85% of your available equity depending on a variety of factors, including your credit rating, home value and amount owed on your existing home.
Learn the facts—we’re here to help
There are a few things to consider before applying for a bridge loan. For instance, how much equity do you have in your home? This will be a major factor for your bridge loan. And what is the real estate market like in your area? Another thing to remember: to take advantage of the convenience and down-payment power of a bridge loan, you’ll also need to qualify for two mortgages at the same time (even if it’s only temporarily).
The bottom line? The flexibility a bridge loan provides you doesn’t have to be confusing or intimidating. That's because Spring EQ offers the leading tech and expert team to help you understand the process and make it as smooth as possible for you. Learn more about bridge loans today—get in touch with us now.