Families may consider relocating to another home because they either want to downsize or upgrade to accommodate the growing needs of a family. Some families planning to relocate may find it beneficial to use a bridge loan, especially for those who want to avoid the stress related to finding and moving to a new home.
Homeowners who are aggressively searching for a new home might experience difficulty in finding a prospective home because there’s an ongoing housing inventory decline and prices of listed homes have increased. The transition from selling the current home to buying a new home is stressful. Some families who were able to sell their current home consider renting for a while until they find a new home that will suit their needs. It means families might have to move twice which is most often than not inconvenient. Things could become more stressful for a family if the funds they intend to use to make a new home purchase goes to rent.
A bridge loan is a viable option for families who want to have a smooth transition from their current home to a new home.
Bridge loans eliminate the need to find a temporary home
In residential real estate, bridge loans enable homeowners to buy a new home and move in immediately without having to worry about selling their current home first and use the proceeds to buy another home. Families who are eligible to take out a bridge loan eliminate the inconveniences of having to move temporarily on a rental property or having to live with a relative and wait until they finally find a new home that suits their needs.
Bridge loans give homebuyers an edge
Typically, home sellers and their agents would not waste their time dealing with homebuyers who need to sell their home first before they can take out another mortgage to buy a new home. With bridge loans, homeowners could secure immediate financing and make a reasonable offer to home sellers, just like first-time homebuyers who have secured a mortgage pre-approval.
Bridge loans could help pay-off current loan balance
A bridge loan could help homebuyers pay-off the entire balance on their current mortgage if they’ve already built a significant amount of equity in their home. In some situations, homebuyers could even get excess funds from their equity and use it to increase their down payment on their next home purchase so they can get a lower interest rate in their next mortgage.
When it makes sense for homebuyers to use a bridge loan
A bridge loan is a viable option for homebuyers who want to access the equity in their current home and use it to buy their next home to move in right away. Bridge loans make sense in this current housing trend where homebuyers have to deal with low housing inventory and recent home price increase.
Find out if you qualify for a bridge loan
If you’re considering using a bridge loan for a smooth transition of your family or to put a larger down payment to your next home, a professional RPM loan advisor may work for you. Get in touch with us to better understand your bridge loan options today.