Can’t buy a new home until you sell yours?
A bridge loan could be the solution.
If you’ve decided to sell your current home and buy a new one, you might find yourself in limbo. It can be difficult to secure a contract to sell and close on another property all in the same time period. A bridge loan is a short-term mortgage used to bridge the gap.
Are you unable to make a down payment on the new home before you receive money from the sale of your current one? A bridge loan will cover those costs. With a bridge loan, you’ll also be able to make an offer without a sales contingency — making your offer much more attractive. An offer that relies on the buyer selling their home first is risky for a seller.
Bridge loans have a 8-month term and must be paid off in full at the end. The loans have limited eligibility and a high credit score is needed.
A bridge loan is a good option for borrowers who:
- Can’t afford a down payment until they sell their current home
- Have their house on the market but already found another home they love
- Are being transferred to a new location immediately
Qualifications and terms:
- Current home must be listed for sale
- 8-month, interest-only term followed by a balloon payment
- 80% CLTV max on current home
- DTI max will be based on current mortgage payment, bridge loan payment, and mortgage payment for new property
- Not available in all states