 Tammy Zurfluh Mortgage Planner Vice President Office: (815) 986-7108 First Time Home Buyer? How much home can you afford? Need a Bridge Loan? Need a Construction Loan? What items will be needed for the Application? |
 Back to Frequently Asked Questions Need a Bridge Loan? In a seller's market, the competition for houses can be fierce. Many sellers will turn down any offer they receive that has a contingency clause (for example, a clause that states the offer is contingent on the buyer selling their own house). This can be problematic for the buyer who does indeed have a house to sell. To stay competitive in a tight market, some buyers make the choice of securing a bridge loan (also known as a swing loan or bridge financing). A bridge loan covers the gap between the time a buyer closes on their new home and the time in which their old house sells. Typically a bridge loan is structured as a six month loan with monthly interest payments being made. The bridge loan can pay off the buyer's first house with the remaining funds, minus closing costs, Realtor fees and six month's of interest, going toward the down payment for the new house. When the first house sells, the bridge loan is paid-off. If the old house sells within six months, the buyer will pay only the interest that accrued through the date of the loan. This is the typical bridge loan scenario for most buyers. A bridge loan can help you make a competitive offer on a property even though your first house has yet to sell. If you'd like this extra bit of negotiating leverage, lets get together to talk about your options. Let me know a good time to contact you. I look forward to helping you! |
