What You Need to Know About A Bridge Loan Mortgage

A bridge loan mortgage is a short term loan that a potential home vendee can apply for in the event that he lacks adequate money to purchase a new home, while awaiting the sale of his current home. This means that the buyer will temporarily enjoy the ownership of both homes before the old one is sold. The old home will serve as collateral and will contribute largely in the repayment of the loan for the new home. If you are thinking about taking a bridge loan mortgage, here are facts you will consider knowing:

The repayment period

The duration taken to repay such kind of a loan is usually shorter than the conventional time allowed by bank loans. Usually this period averages between six months and a maximum of three years, reason being that the loan is just a bridge to cross you over to a point in time. The lender sweetens the deal by minimizing the troubles of a prolonged loan application process or disbursement time but will as well limit the demand time.

The interest fees

It’s generally accepted that the interest rates for this kind of loan will be higher than the mainstream bank loans. The lenders normally allow a more flexible repayment pattern in terms of installments but the interest rates remain inflated. However, this barely discourages serious buyers considering how fast their desires are met by the loan. Furthermore, the old home when sold will cover a great part of the loan so that the eventual amount will not seem large.

The exit strategy

Having an established way of settling the loan gives one confidence of approaching the lender. Most lenders will demand to see your intended ways of covering the loan before they lend you. More often than not they will emphasize on scrutinizing your credit worthiness or collateral security. A previous history of a successful timely loan repayment is an advantage because it actually boosts your credibility. On the same line, having a back-up plan such as another asset that you can sell to settle the loan is of equal importance. Bridge loan mortgage have no pre-payment penalties unlike other hard loans.

Approach to the lender

Private lenders require objective persuasion to lend by proving your loan worthiness. Therefore the approach you make will play a part in your chances of acquiring the loan. You will find it valuable to present yourself with a language that portrays commitment, confidence and professionalism. Abiding by the first hand rules that are set will put you at a better position also. Other demands should be made later.

Bridge Loan Mortgage

Bridge Loan Mortgage Benefits
A bridge loan mortgage is a type of loan that helps people in situations where sometimes you want to buy a new home or property and at the same time sell your current home. Just like the name suggests, it is a relatively convenient way that can facilitate individuals to acquire new property while still planning to sell their own. US funding solutions is one of the companies that offers this kind of service at affordable rates. This is a short-term loan because its main aim is to assist you get the funds to purchase your new home before you dispose your existing one. It also means that you will be servicing two loans until you sell of your first property. Included in these bridge loan programs are commercial rehab loans used to upgrade a commercial property,
There are several cons of taking a bridge mortgage loan. One of these advantages is that allows your current home or property to be used as collateral and hence use the money to purchase your new property. As soon as you are done selling your old home, you can as well use the remaining cash to settle the bridge loan mortgage. It is advisable that you get your loan from the same lender. For instance if you took your first mortgage from US funding solutions, then there is no need of going elsewhere since they also provide the same kind of financial solution.
It is important that you speed up the process of selling your former home or property otherwise you will continue to repay the bridge mortgage loan with a lot of interest. The earlier you sell the less money in terms of interest you will pay. Most companies offering this kind of loans such as US funding solutions understand that sometimes their customers are faced with situations where they need urgent money to purchase new property while still repaying the mortgage for their existing homes. Although the interest charged may sometimes seem high, it is usually the easiest way to get money to buy your new home.
US funding solutions is one of the financial institutions that guarantees its clients the best kind loan facilities including the bridge mortgage loan. Many people have come to embrace this type of loan. Although it is an expensive type of loan especially if the existing property stays long before being sold, it is worth taking since it can help you acquire your dream home. The key thing with this type of loan is to ensure that you dispose as quickly as possible your existing home or property. This will see you pay less in terms of loan interest.