Mortgage Hack #16
How it works: Bridge loans are a form of short-term financing that bridges the gap between buying a home and selling the previous one and serves as a source of funds until a buyer can secure permanent financing. They can provide cash flow during a transitional period, like moving from a current home into a new home. Bridge loans are short term loans that can help put cash in their pockets quicker to finance a new home. As an alternative, home equity lines of credit can serve the same purpose as a bridge loan.
Benefit to Buyers:
Offers the opportunity to purchase a new home before the current home is sold
The loan can be used to pay off the entirety of the mortgage on an old home and put the remaining money borrowed toward the down payment on the new residence
An offer can be made on a new home without having to implement a sale contingency
Benefit to Sellers:
No sale contingency from the buyer
Reference: 2022 Keller Mortgage LLC