Everyone could use some assistance when dealing with real estate. Whether it be the help from hard money lenders, or even just your neighbor! For instance, say you have found the house of your dreams and are ready to move. The only problem is the seller needs to close quickly and you haven’t put your current home on the market yet. This problem can be solved with a bridge loan. Before you apply for this kind of loan, there are a few things you should know.
- You Might Not Be Required To Make Immediate Payments on the Loan
In many cases, an initial payment on bridge loans is not necessary for the first few months. This means if the home you are moving out of sells quickly, you may be able to repay the bridge loan in one lump sum with the proceeds from the sale.
- A Bridge Loan Allows You to Make Immediate Offers on New Homes
Rather than putting an offer on a new home contingent on the sale of the home you’re moving out of, you can purchase your new home right away. This is crucial in a seller’s market where contingent offers are not accepted.
- This Type of Loan May Have More Stringent Requirements
Because the bridge loan lender is essentially approving you to own two homes, the process for receiving a bridge loan can be more rigorous than a typical mortgage loan. Most borrowers who are approved are in good standing with their current mortgage company and have a low debt-to-income ratio.
- The Time Frame for Bridge Loans Is Considered Short-Term
Most people who obtain a bridge loan are not intending to drag it out for years. It can be financially stressful to pay two mortgages as well as a bridge loan, so many borrowers want to be certain the home they are moving out of will be bought swiftly before applying for a bridge loan.
When you need help from California hard money lenders to purchase your future home, turn to North Coast Financial. Call (760) 722-2991 with any questions you may have or apply online to start moving forward.
