Bridging loans are gaining popularity each passing day. No doubt that financing a new home in the current scenario is tricky, particularly when you have found your dream home, however have not sold the old home yet. If this is the case then talk to a money-lender about getting this type of loan. Being short-term loans, they make for an economical and simple way to use your existing home's equity. However, make sure you discuss with the lender different aspects of this loan before making any decision.
Check out the following few tips to acquire this loan.
Select terms for the loan that you know can afford in case your home is on the market much longer than anticipated. Never presume that it would sell in four or five months because it could take a longer time too. Delayed payment terms or interest are common for these loans, however only temporarily. Finally, some principle amount is due; hence ensure you can sway the payments in the worst case.
Have a discussion with your money-lender to see whether you qualify for it or not. Knowing all the plus and minuses about the possibility of acquiring the temporary financing would help you in making a well-informed decision whether to proceed with buying a new house or not.
Search the market properly for the best terms and rate of interest. As these loans are considered as temporary financing, therefore, do not expect interest rates to be low as in the case of long-term financing. However, they often vary from one money-lender to another. So, doing home-work certainly pays off.
Work out strategy that would help you sell the home quickly. Generally, when a home is sold, proceeds received from it go to payoff the finances on the property. In short, selling the house quickly is the only key to pay off the loan amount.
Apply for this loan at the time of applying for the primary mortgage loan. If possible, try to get the two loans from the same money-lender. This would help you in saving some money on the closing costs.
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