Home Bridge Loan

Obtaining a home bridge loan may seem like the perfect way to ease the stress of moving. Perhaps you have to relocate and need to sell your home quickly. Is a bridge loan the best way for you to manage paying two mortgages ?

A bridge loan is basically just like taking out a second line of credit through your home equity. The amount of the interest and loan origination charges are a lot higher than a traditional first mortgage payment rates. You may be able to qualify for a bridge loan if you have apply fr an amount that is less than eighty percent of your homes fair market price. anything more than 80 percent may be too much risk on the part of the lender.

What will happen if it takes several long months or even a year for my home to sell?In reality you are responsible for three separate mortgage payments.

1. Your first mortgage payment

2. The Bridge Loan

3. Your new mortgage or rental payment

There are also the hidden fees you strongly need to be aware of.

Home owners association fees

Property Taxes on 2 properties

2 Sets of basic utilities.   You will need electricity for home showings with your Realtor.

Possible Issue - Consider the worst case scenario before you decide if a home bridge loan is for you. It is ten months into your home bridge loan, you are juggling both household expenses, and the three mortgage payments. You find yourself taking a few dollars each month out of your savings account to stay afloat and current on your monthly bills.

You hear on the news that there has been several robberies in your old neighborhood, and a the states largest employer has closed it’s door. Since this was the main employer of your town, the property values are not as strong as before. This now has you owing more in mortgage payments, than the current market price of your home.

If you feel confident that you could comfortable afford to possibly float and support two households and the extra mortgage payments, then a bridge loan may work out well for you.