What they are, and how you can get one.
In today’s competitive real estate market, Sellers typically won’t accept offers that depend on the sale of a Buyer’s existing home. It’s just too much risk; What if the sale falls through? In these situations, a bridge loan companies can provide a crucial tool for getting your offer accepted.
Use our mortgage calculator to decide on a home pricerange before applying for a bridge loan.
What’s a bridge loan? How does it work?
A bridge loan (AKA swing loan) is an agreement that helps a homeowner buy a house before they sell their current home, easing the transition between homes.
In more technical terms, a bridge loan is a special-purpose refinance of your existing home loan. It’s special because everyone involved (you and the bridge loan lender) knows that the bridge loan is temporary. A bridge loan allows you to extract some of the equity from your existing home prior to selling it so that you have money for the down payment on the new home — letting you avoid a panicked transition from home-to-home.
When should I get a bridge loan?
Bridge loans are a great choice for a range of situations:
- The Seller won’t agree to Buyer contingencies
- You’re relying on the money from your sale to purchase a new house
- You’re nervous you won’t find a new home fast enough
- The closing dates for your current and new home aren’t compatible
In what states are bridge loans available?
Accunet’s most popular bridge loan money source will make bridge loans on primary residences located in:
Unfortunately, we currently do not have any bridge loan lender for Florida properties, the fourth state in which Accunet lends.
If Accunet is providing a first mortgage on the new property you’re buying, we can facilitate getting your income and credit documentation to the bridge loan lender with your permission. If you don’t need a mortgage on your new property, you’ll work directly with the bridge loan lender.
Questions? Contact Accunet for step-by-step guidance through our bridge loan program.
Key features of our most popular bridge loan lender’s product:
- High borrowing threshold: Borrow up to 80% of the appraised value of your current primary residence. An appraisal ordered by the bridge loan lender is required.
- Pay off your existing mortgage: The bridge loan must pay off all existing mortgages on the property, freeing your finances to focus on your new home.
- Affordable closing costs & origination fees: Closing costs are usually between $500 and $1,000 (depending on the size of the loan), plus an origination fee of $500, or 0.5% of the bridge loan amount — whichever is greater.
- Optional principal payments: Monthly payments are interest-only, but you can make principal payments if you wish.
- Flexible timeline: The bridge loan must be paid off when your existing home sells, or at the end of 10 years (yes, years).
- Thorough pre-approval: Your monthly interest, property tax and insurance expense are factored into your pre-approval. We make sure you’re getting a bridge loan you’ll be able to afford.
- Built-in grace period: The bridge loan money isn’t available until 3 business days following the loan closing, giving you the right to cancel the refinance.
How do I buy a home without a contingency on mine?
Not every homeowner qualifies to carry two monthly mortgage payments (including taxes and insurance on both the new and existing home), and others simply don’t want to. In those cases, the only way to write an offer without a sale of home contingency is to sell the existing home first, and then rent or move in with relatives while searching for the next home.
Know your options
Crossing the bridge from your existing home to your new home can be a stressful financial. Accunet has the best puzzle-solvers in the mortgage industry with a full set of tools in our mortgage toolbox to solve help you transition from home to home.
Click here to find out more, or to get started on your bridge loan application.