If you are planning on moving to a new home, you should consider applying for a home bridging loan. These loans are designed to help you move quickly and easily into a new house without having to worry about selling your old one immediately. Bridge loans are more popular today than they ever have been and here are five reasons why:
1. You Don’t Have to Wait to Move
Traditionally, many people have waited to sell their homes before moving, or even beginning to look, for a new one. With a bridge loan, you don’t have to sell your old home before you purchase your new one. This means that you don’t have to rely on family, friends or even a temporary rental to provide short term shelter for you and your family. While buying a new home used to mean waiting to sell your old one so that you had money for a down payment, a bridge loan provides that money, allowing you to move more quickly.
One of the biggest benefits of a bridge loan when compared to other loans is the ability to keep your home on the market. With a bridge loan, there are no restrictions on when you place your home on the market or how long it remains for sale. This can be helpful, especially if you want to list your home while you are searching for a new one. Because selling your home can take months, the ability to list your home immediately can shave months off of the home buying process.
3. Payments May be Deferred
Lenders understand that carrying two mortgages can be expensive and will sometimes defer your loan payments for several months. By having your payments deferred, you gain a bit of breathing room when it comes to your budget. You will be given time to sell your first home, freeing yourself from a double mortgage and giving you the funds that you need to begin repaying your loan.
4. No Contingency to Buy
Many people will put a contingency offer on a new house so that they aren’t forced to complete the purchase if their old home doesn’t sell. If you did put in a contingency offer, a bridge loan can allow you to eliminate the contingency and move forward with the buying process. A bridge loan can also be helpful if the current owner of your dream home refuses to accept a contingency offer from any potential buyers.
5. You Can Work with One Lender
It’s often easier to work with one lender when it comes to the home buying process. Most of the major home lenders offer bridge loans along with mortgage loans, ensuring that you don’t have to deal with multiple financial institutions when purchasing your new home.
While there are risks to bridge loans, they are far outweighed by the benefits for most home buyers. If you want to purchase your new home before you sell your current one, a bridge loan can be exactly what you need to help you move forward in the process. If you are interested in learning more about bridge loans, contact your financial advisor or lender for assistance.
Scott Phillips is a freelance blogger who writes about the benefits of home bridging loans. You can apply for home birding loans and Net Loans here.