Residential Mortgage Bridge Loans

Many times homeowners find themselves in a familiar situation; the home they currently have a mortgage on no longer suits their needs and they have their eye on the perfect residential home they would like to purchase in order to either move up or downsize. There’s one little problem with purchasing the new residential home, however. They still have a mortgage on their existing home and they are concerned that by the time they sell their current home, the new home they want to buy will already be sold. Sadly, many people think that if they don’t have a lot of disposable income it would be impossible to get a mortgage loan for the new home while waiting for the old home to sell. This isn’t necessarily true. It is possible to be able to go ahead and snatch up the new residential home, without having to get the seller to agree to a contingency contract and without needing a ton of extra money. Residential mortgage bridge loans make it possible for homeowners to get a loan for a new property while awaiting the sell of another home.

Basically, the way a residential bridge loan works is that the homeowner accesses the equity they have built up in their current home in order to obtain the hard cash they need to make a down payment and finalize the sell on a new home. In order for a bridge loan to work effectively, however; a few stipulations must be met. The homeowner must have sufficient equity in the home they currently have a mortgage on. This means that if they have obtained a refinance loan sometime in the past and used a cash out option, they may not have the necessary equity they need for a bridge loan to work. In addition, because the homeowner will need to cover two residential mortgage loan payments at the same time for awhile; it will be imperative that the loan applicant have good credit and be able to demonstrate that they are capable of making the two mortgage payments. If the homeowner thinks it might be while before their first mortgaged home will sell, one option they may consider to cover the two mortgage payments is to rent out the old home.

Residential mortgage bridge loans help to bridge the gap when it is either time to move up into a large home due to a growing family or into a smaller home after the children have left the nest. Whatever the reason, bridge loans are definitely worth looking into if you have your eye on a property and can’t wait for your current home to sell.