Bridge Loans
The Process of selling a home and buying a new one can be complicated. Our bridge loans can help avoid making a contingent offer on your new home and best stage your old one. This puts you in the strongest position on both sides of the transaction.
A bridge loan is a loan that allows you to access the equity in your current home and use it as a source of a down payment for a new home. While a bridge loan is a specific type of loan, it is only one of the tools to help you transition to your new home. Our transition toolkit includes six key loan strategies to help you transition in the smoothest, most cost effective way possible. We often combine multiple tools to deliver a customized solution to fit your situation and goals. If you think you need a bridge loan, talk to the bridge loan expert.
Traditional Bridge Loan | Description and Key Features
A traditional bridge loan allows you to access the equity in your current residence and use it for the down payment on the new residence. Interest only payments are made while the loan is active and the loan is then repaid when your current home sells. Traditional bridge loan costs can vary greatly between lenders and this is a great option.
6 month balloon loan with interest only payments
Loan amounts up to $500,000
Can access up to 85% percent of the value of your current home
Streamlined process because your bridge loan and the loan for your new home are with the same lender
Full appraisal not required for loan amounts up to $400,000
Associated loan costs can be paid out of the loan proceeds
Relatively low cost option
Must be able to qualify for all three loans concurrently
Buy Before You Sell | Description and Key Features
Buy Before you Sell is an innovative new loan program. It not only allows you to access the equity in your current home, the lender makes an offer to buy the home This allows you to make a non-contingent offer on anew home. This program has the unique advantage of removing the payment obligation of your departing residence so you only have to qualify for the new loan.
Unlock equity up to 2 million
Can access up to 75% of the value of your existing home as a bridge loan
0% interest on the bridge loan
Current home must be listed within 21 days and you have 120 days to sell
Sell your home on the market and get full market value
No appraisal required
The buyer pays 2.4% of the sale price of their current home making it a more expensive option
The buyer only needs to qualify for the loan on the new home
Recasting | Description and Key Features
Recasting isn’t a loan program at all. It is a strategy. The buyer makes a small/minimal down payment on their new home using personal funds. Once the primary residence sells. a lump sum payment is made to the new lender and your loan payment is recalculated as though a larger down payment had been made initially.
Lowest cost option
Borrower must have personal funds for the down payment
Only available on conventional loans
Can access all of the equity in your current home
Can be combined with other bridge options
Borrower must be able to qualify for both loans
HELOC | Description and Key Features
There are two ways a HELOC can be used to help the transition to a new home. You can take take out a HELOC on the current primary residence or it can be taken out as a second loan on the new home.
When taking out a HELOC on the current primary, you obtain funds for the down payment on a new home. It is then paid off when the house is sold. The buyer does need to be able to qualify for all three loans so it is best to talk to a bridge loan specialist first.
Low cost option
The percentage of funds you can access vary depending upon the HELOC program
May or may not require a full appraisal
The HELOC process generally must be completed prior to the listing of the current primary
Borrower must be able to qualify for all three loans
Another option is to take out a HELOC on the home you are purchasing. A standard mortgage is taken out in the same amount as it would be if the current primary had been sold. A HELOC is also taken out and both loans close at the same time. The HELOC can then be paid off once the current home sells. This option does require personal funds for a 10% down payment on the new home
Lower cost option
Can be used to finance up to 90% of the new home so a 10% down payment with personal funds is required
Can access 100% of the equity in the current home
No additional appraisal required
The HELOC can be kept in place as future source of funding
Must be able to qualify for three loans
National Credit Union | Description and Key Features
This is a program through a national credit union where they will ignore the payment on the current loan. The buyer only need to qualify the payment on the new home. It can mimic the buy before you sell program at a lower cost
Higher cost option
Limited loan options for the new loan
Can access up to 70% of the equity in your new home
Appraisal not required
Borrower only has to qualify for the new loan
