Questions and Qualifications:
1) What is a Bridge Loan used for?
Bridge Loans allow borrowers to use the equity in a trailing home to secure all or part of the down payment to purchase a new home.
2) What is the advantage of a Bridge Loan?
It allows a very qualified borrower to make a non-contingent offer to purchase and compete for the same home, or for someone who does not need to sell another property to close a purchase escrow.
3) What is the cost of a Bridge Loan?
Bridge Loan pricing can vary depending on if the trailing home is already under contract to be sold, or if it is just listed. The location and list price can affect the cost of a Bridge Loan. It should be noted that Bridge Loans are interest only, and the loan amount can include 3 months of deferred payment.
4) How have Bridge Loans been affected by the Dodd/Frank Financial Reform Law?
Bridge Loans are not as easy to secure because the 1st td underwriters now have to calculate total debt to income ratios, but options still exist for the very qualified borrower.
5) How qualified does a borrower have to be in order to secure a Bridge Loan?
While the borrower may not have to qualify for the actual Bridge Loan payment, they will have to qualify for the payments on the new loan for the next home as well as the current payments on the old loan on the trailing property.
Call (714) 349-7733 to see if the math on a Bridge Loan works for you or your client.