Individuals selling one home and buying (or building) another can face challenges with coordinating both events, especially in competitive real estate environments. Bridge loans are an alternative for individuals experiencing this dilemma. The following information on Waltham MA bridge loans – introduction to bridge loans will assist you with understanding this financing alternative.
Waltham MA Bridge Loans – Introduction To Bridge Loans
Many homeowners have equity in their existing home. There may be a gap in the date those funds are available if a property purchase must be completed prior to the existing real estate sells. Bridge loans are a solution to bridge the gap. It is an alternative to a home equity loan (since many mortgage companies do not approve home equity loans for properties currently marketed for sale).
The underwriting process and criteria for bridge loans will differ from conventional loans. Because bridge loans are for short periods of time, they are not normally submitted to the secondary mortgage market and thus need not meet the same standards. Minimum credit scores, ratios, and other qualifying criteria can range from one company to another. During the length of the bridge loan, the borrower will basically have two home loans (one on the existing home and one on the property purchased). Therefore, the borrower must be able to carry both.
Evaluating the Advantages and Disadvantages of Bridge Loans
Bridge loans enable individuals to purchase and sell without the use contingenies and scheduling same day closings. This can often provide added negotiation ability or put together deals that can otherwise not work out. It can also make the packing and moving coordination less stressful by eliminating the need for interim storage in same-day closing situations. On the other hand, not all homeowners may qualify for bridge loans. They are also more costly than home equity loans. Homeowners should evaluate these advantages and disadvantages with the assistance of both real estate agents and mortgage consultants.
Where to Begin
Whether you should request a bridge loan is dependent on your finances and home buying and selling goals. A local lender that offers bridge loans can offer more in-depth information beyond the Waltham MA bridge loans – introduction to bridge loans above.