Mortgage bridge loans have of recent become very popular among the families striving to own a dream home in America today. Mortgage bridge loans are simply the temporary loans that help bridge the gap occurring between the sale of a desired new home and the home buyer’s acquisition of a new mortgage. This gap is mostly the result in instances when a home buyer gets a new dream home in the market that will most probably be sold before he or she can place his own home in the market for sale.
The fact that you may want to buy a new home before you sells off the one you are occupying creates a gap that can limit one’s ability to ever acquire a dream home. In such instances, the bridge loan can be secured to the already existing home and the acquired funds (provided by the bridge loan) can be used as the down payment of the desired new home. If you want to purchase a move-up home before selling the one you are currently occupying, there are two common sources of down payment for the new home namely bridge loan financing or home equity loan.
Mortgage bridge loans have greater benefits for a borrower than any home equity loan. More importantly, it is impossible to acquire a home equity loan when the home is already placed in the market. The bridge loan is therefore the more favorite of the two. And this is where your family finds a lifeline in bridge loans. Today, it is almost impossible to buy a move-up home when you are already servicing the mortgage or a current home, even if the current home is inadequate for the needs of your family at that time. It would take ages before your family can relocate to their dream home, one that is more adequate for your needs.
Mortgage bridge loans help home owners qualify to purchase a move-up home by simply adding their existing loan payments for the current home (if its mortgage is still unpaid) to a new mortgage plan for the move-up home they home owners desire. This is a means of achieving a dream that most families could otherwise find impossible to accomplish. Bridge loans are therefore the best option when a home owner is desirous of another home when still servicing an existing mortgage for the present home. You do not have to wait until the first mortgage is fully repaid.
Secondly, the bridge loans are useful when the home buyer is faced with a deadline for a purchase closing on the move-up home before he or she sells the existing residence. Waiting until the existing home is sold off will mean that the new house will already have been sold to other buyers and that your family will have to live in temporary residence for a long time.
With mortgage bridge loans, home buyers are able to own two homes, albeit for a short-term period. This saves your family a lot of hustles since they do not have to seek for temporal accommodation. The family will simply relocate to the new home and then sell off the first home without urgency. Once the home is sold, the first montage is fully cleared and you can start payment on the new mortgage for their dream home. That is an unbeatable lifeline for your family, one that is a win-win deal.