How Can A Mortgage Bridge Loan Help You?
If you are looking for a second home because you wish to upgrade your present home, you can consider taking up a mortgage bridge loan. This usually happens when home owners have yet to put up their homes on the market for sale.
The home buying scenario is quite common nowadays when you are looking to buy a home that is more suitable to your family's changing needs. You scout around and found the most wonderful and suitable home for you and your family but your personal finance is able to afford the seller's sale amount. A mortgage loan is the perfect solution and allows you to temporarily continue the existing mortgage commitments while taking care of the required financing the new home requires from you.
The mechanics of how a mortgage bridge loan works is that it uses your present home as collateral and allows your to pay off whatever mortgage from your existing home and provides you sufficient finance to pay off the required down payment of your new home. After your existing home has been sold you will then use the available funds to pay of the outstanding bridge loan amount. From here on you will just have to continue paying new mortgage loan on the new home you just purchased.
Most mortgage bridge loan is set up as a one year term period but with a high pre-paid interest. You will get back some portion of this interest payment if you do manage to sell your first home during this time. Otherwise you just continue to make payments on interest on the loan.
One disadvantage of such loans is that the interest rates tend to be high but it is still popular with borrowers who have found it a good solution to their cash tight problem while upgrading their home.
The home buying scenario is quite common nowadays when you are looking to buy a home that is more suitable to your family's changing needs. You scout around and found the most wonderful and suitable home for you and your family but your personal finance is able to afford the seller's sale amount. A mortgage loan is the perfect solution and allows you to temporarily continue the existing mortgage commitments while taking care of the required financing the new home requires from you.
The mechanics of how a mortgage bridge loan works is that it uses your present home as collateral and allows your to pay off whatever mortgage from your existing home and provides you sufficient finance to pay off the required down payment of your new home. After your existing home has been sold you will then use the available funds to pay of the outstanding bridge loan amount. From here on you will just have to continue paying new mortgage loan on the new home you just purchased.
Most mortgage bridge loan is set up as a one year term period but with a high pre-paid interest. You will get back some portion of this interest payment if you do manage to sell your first home during this time. Otherwise you just continue to make payments on interest on the loan.
One disadvantage of such loans is that the interest rates tend to be high but it is still popular with borrowers who have found it a good solution to their cash tight problem while upgrading their home.