SAVANNAH, GA, Jul 24, 2014—If you’re currently in the financial throes of buying or selling a property, one term you may have heard mentioned is a “bridge loan.” A bridge loan is a short-term bank loan of the equity in the home you are selling. Usually, homeowners take out a bridge loan to wiggle out of a tight spot.
“Maybe you’re closing on the home you are buying before you close on the property you are selling,” explains Connie Ray, President/Owner of Coldwell Banker Platinum Partners. “This loan basically enables you to have a place to live after the closing of your existing home.”
But why a bridge loan and not a home equity loan? While a home equity loan is less expensive, bridge loans contain more benefits for some borrowers. These benefits can include deferred monthly payments, and the fact that the buyer can immediately put a home on the market without restrictions.
The key to a bridge loan is having a qualified buyer and a signed contract. Usually, the lender issuing the mortgage loan on the new home will write the interim financing as a personal note due at settlement on the property being sold.
“If, however, there is no buyer for the property you have up for sale, most lenders will place a lien on the property, thereby making that bridge loan a kind of second mortgage,” says Ray.
It can be complicated, so make sure you have thought out all the details before acquiring a bridge loan. “Be sure to remember that there are costs and fees involved with bridge loans, and interest rates are usually quite high,” notes Ray.
Don’t feel comfortable with a bridge loan? A few other options are borrowing from your 401(K). “Actually, any secured loan is acceptable to lenders for the down payment,” explains Ray. This includes stocks, bonds or an insurance policy.
For more information on bridge loans, please contact Coldwell Banker Platinum Partners at Connie.F.Ray@mycbpp.com, 912-352-1222, or Coldwell Banker Platinum Partners.
Coldwell Banker Platinum Partners, established in 1995, is a full-service real estate firm with more than 100 sales agents strategically dispersed among its office locations spanning from Beaufort, South Carolina, through the greater Savannah area to St. Simons Island, Georgia. The company was founded by Connie Farmer Ray, president and CEO of Coldwell Banker Platinum Partners. In addition to listing and selling residential real estate, Coldwell Banker Platinum Partners other divisions include commercial real estate, property management, relocation services, a real estate school, mortgage lending, and a publishing/media division. The companys corporate offices are located at 6349 Abercorn St., Savannah, Georgia. For more information visit their Web site at www.MyCbpp.com or call 800.505.8111.