Mortgage Bridge Loans

Mortgage bridge loans are essential to individuals who are looking to buy a new property while they are still selling their current property. This type of loan is for people who have not yet made up their minds about selling their property or have found a property which they do not want to let go.

You could have been looking for a specific home for your family with certain requirements. Having found it, you are now faced with one challenge; you are still holding on to your current home but the seller of this new house wants to sell it immediately. What is the solution in such a situation? The solution is to apply for a mortgage bridge loan and this will help you have enough cash to finances the new home. As you can see from its name, this type of loan bridges the gap between you continuing making mortgage payments for the current home and providing you with enough finances to purchase your new home.

Benefits of mortgage bridge loans
Other than helping you to purchase a new home, mortgage bridge loans allows you to use your current home as security against the loans. In addition, you can use the mortgage bridge loan to pay your current mortgage. It also provides you with enough funds to use as down payment on the new home. The higher the down payment amount, the more affordable the rate of interest you will receive from lenders. You can then use the money from the sale of your current home to liquidate the bridge mortgage loan.

Loan duration
Mortgage bridge loans are usually advanced quickly and help you close a real estate deal quickly. The rate of interest on these loans is usually high and can range between 12 % and 15 %. The payment duration for the loan is 1 month to 3 months. This provides you with ample time to repay the loan. This is unlike other types of mortgage loans that have longer payment duration of 10, 15 to 20 years.

Loan approval
Compared to other mortgage loans, mortgage bridge loans do not take long before being approved. This is because the processing period is shortened in order to provide immediate financial assistance to borrowers. When calculating the price of normal loans, lenders look at the future return of the property while for mortgage, they only look at the current value of the property.

Credit checks
Mortgage bridge loan lenders make it easy for people with bad credit to access the loans. There are minimal credit requirements that must be met by the borrower. Moreover, mortgage bridge loans lenders will only use the home as security. This is unlike other types of loans that require borrowers to use a co-signer in addition to using the home as collateral before being approved. Other than the high rate of interest on the mortgage bridge loans, they are really quite favourable. The loan will help you buy your own home while still living in your current home. For instance, you can come across a nice home being foreclosed but you lack the finances to seal the deal. A mortgage bridge loan will sort you out if you ever find yourself in such a situation.

Buying your dream home
The number of lenders who provide this type of loan is on the increase and you are likely to get a better deal if you compare the rates charged by several lenders. Although they come with an element of risk, mortgage bridge loans are ideal if you are looking for quick cash to purchase your dream home.