Here’s why bridge loans are so helpful for sellers in our market.
Bridge loans can be an incredibly helpful tool in a hot market like ours, so today I’ll be covering what bridge loans are and how you can use them to your advantage.
A bridge loan is just what it sounds like—it’s a short-term loan that bridges you from your current home to your new one. The bridge loan is typically created by using your current home’s equity. Usually, the life of the loan is however long it takes you to sell your home; in some cases, however, the loan may be a 12-month term.
Bridge loans have been around for a long time, most often used by the wealthy. People would use the bridge loan to avoid having to sell their current home to buy a new one. By doing so, they have plenty of time to look around, buy the home they want, and sell their old one after they get settled in.
So, how does this help people today? To put it simply, sellers in our market aren’t interested in contingent offers. They don’t want to accept an offer from you that depends on the sale of your old home. It raises a lot of concern for sellers, so instead of dealing with contingencies, they’ll choose one of the many other buyers out there.
If you want to buy a home but also have one to sell, bridge loans offer a great way to do both. They remove the contingency, make your offer more attractive, and help you ensure that you have a new place to live. This also prevents people from selling their home first, being unable to find a new property to buy, and having to rent while they wait for the right place.
If you’ve been trying to figure out how you should tackle the buying and selling process simultaneously, a bridge loan could be your solution. You can find the new home you want, have a bridge loan in place, buy your new home, and then list your old home.
If you have any questions or would like more information about bridge loans, feel free to reach out to me. I look forward to hearing from you soon.