What is a Bridge Loan?
Bridge loans or bridge financing loans are loans that bridge the gap between the purchase of your new home and the sale of your old one. Often times, people are ready to move but don't want to wait until their old home gets sold to make that move - especially if they've found the home they want to move into and want to make an offer quickly and without a home sale contingency.
How does a Bridge Financing Loan work?
Generally, the bridge loan is the loan that is secured by the equity in the house already owned and the term will typically be for about six months. On occasion, the bridge loan could also be the loan that is used to purchase a property so make sure you speak to a trustworthy lender, like First Savings Mortgage (the largest private Mortgage Lender in the Washington DC Metropolitan area) to ensure you are getting the appropriate Bridge Loan to suit your individual needs.
How do I know if I really need a Bridge Loan?
Not everyone needs a Bridge Loan, especially if they are not in a rush to move or buy their next property. The best way to understand if you need a Bridge Loan is if you fall into one of these scenarios:
- You've found your next house and don't want to miss the opportunity of putting an offer on it if you wait for your old home to sell
- You are having difficulty selling your old home and are in need of selling it before you need to put a down payment on the new home you are qualified for
- You are relocating and your move is time-sensitive
- You are downsizing to a smaller property or assisted living who expect to gain enough from the sale of their old home to cover the cost of their new one and therefore have no need for permanent financing (and often do not qualify)
If you are in need of Bridge Loan financing, apply for one now or get in touch with one of our expert Loan Officers to discuss your options.