A bridge loan can help you get your offer accepted in a very competitive market without having to sell your home first. Because the DFW market is so hot at the moment, sellers are reluctant to accept an offer if it is contingent on the sale of your existing home. Bridge loans enable you to use some of the equity from your current home to purchase the new one without selling it first.
With homes in the Mckinney, Frisco, Plano, and Dallas market selling within days on the market, buyers need all the resources possible. According to The Dallas News, July sales surged 25% over last year. We work with the best Realtors in the Dallas market, we listen to what they are telling us, and we provide mortgage solutions. Our bridge loan program is a solution.
What is a Bridge Loan?
A true bridge loan is very different from a conventional mortgage. If fact, the vast majority of lenders in Texas do not offer them. We do offer them and have been successfully closing them for years. With a true bridge loan, we will place a lien (or mortgage) on both the existing home, and the new purchase home simultaneously. If there is substantial equity in the existing home, a down payment may not even be required.
When we close on the purchase, a mortgage is placed on that home and on the existing home. If there is a current mortgage on the existing home, that gets paid off and the new mortgage takes place. The new bridge loan will be a temporary loan with interest only payments required on both properties.
When the existing home sells, the proceeds are used to pay off the mortgage and reduce the balance on the new property. We will then provide the permanent financing on the new home.
Things to consider with a Bridge loan
You can buy the home you want and move when you want to move.
Payments are more affordable while the bridge loan is in place because they are interest only.
You will pay higher interest rates initially and the loan is a variable rate mortgage.
You will have two sets of closing cost. You must have at least 75% equity in the combined transaction.
You must be able to qualify for both homes at the same time.
Are there alternatives to a true Bridge loan
There are often several options that might work better than a bridge loan. When we review your application and have collected all your documentation, we will analysis the situation and offer you several options. You select the one that best suits your needs.
Ultimately, we want the home buying experience to be as good as it can possibly be. That is why we are considered the preferred lender to the Realtor community in the Dallas area. To explore your options, call our office at (214) 945-1066, Richard Woodward, our Specialty Lending Manager, will talk with you and access your needs. You will need to complete a full application here, this acts as a road map that guides the buying process.
Your Local, Direct, 5 Star Rated Mortgage Lender, Specialty Lending Manager
Office: (214) 945-1066
Service First Mortgage NMLS 166487
6800 Weiskopf Ave #200, McKinney, TX 75070
Licensed by the Texas Department of Savings and Mortgage Lending (SML) Mortgage Banker Registration, AZ 0924237, CO, FL MLD1342, KY MC358087, OH SM.501988.000, OK ML01483. Service First Mortgage is an Equal Housing Lender. This is not an offer of credit or commitment to lend. Loans are subject to buyer and property qualifications. Rates and fees are subject to change without notice.