We are trying to sell our home, and the home we hope to buy requires a $25,000 downpayment. However, we won't have that kind of money available until we sell our current home. Are there loans available that would cover this cost until our current house sells?
2007-07-22 06:21:08 · 4 answers · asked by apklam 1 in Business & Finance ➔ Renting & Real Estate
This last Feb I bought a house using a bridge loan. It was 9%. I paid interest only. In two months I sold my previous home and paid the bridge loan off.
It was a lein agaisnt my old house and I had $65000 equity in that house and only needed to borrow $30000.
My wife works nights and we did not want to have our old house up for sale while we lived there.
The other idea I had was to get a first and a second on the new house then pay off the second lien as soon as we sold the old house. The interest rate would have been much better but the fees would have been quite a bit higher.
2007-07-22 08:25:42 · answer #1 · answered by glenn 7 · 0⤊ 0⤋
Yes, it's called a Bridge Loan. If you have plenty of equity in your home they CAN be a good idea.
The interest rate is a bit on the high side -- typically 1.5 to 2 percentage points above whatever first you'll qualify for on the new place. However no payments are due for 6 months and you can often pay interest only for the next 6 months. The interest on the deferral period is added on to the loan balance.
The risk of course is that your old place doesn't sell quickly and you wind up behind a rock and a hard place with 2 mortgage payments to make.
2007-07-22 06:27:14 · answer #2 · answered by Bostonian In MO 7 · 0⤊ 0⤋
what you can do is put a deposit on the one you want to purchase, and do a concurrent close, where you close on both at the same time, a good realtor will know how to do this. (why is the deposit so much? usually a couple grand will hold it) if they wont take a couple of grand and you have equity in your home, you might be able to get a home equity line of credit at your local bank, these close very quickly and if your bank knows you, you have other accounts there, they usually are willing to work with you.
2007-07-22 06:28:33 · answer #3 · answered by superloanlady 2 · 0⤊ 1⤋
yes, we just did this in texas, so not sure what you can do in your state.
of course our house we were selling was paid off, call lender in your area, not over the web. and get several quotes.
2007-07-22 07:25:51 · answer #4 · answered by jeanniep 5 · 0⤊ 0⤋