Bridge Loans in Real Estate
Penned by Allison Larson, founder of Novus Home Mortgage.
In the last few years, the average American has gained a ton of equity in their home. The question many don’t understand is how they can use their equity for a down payment on their next home. Often family’s picture having to line up the sale of their current home on the day they are purchasing their new home, which can be difficult to organize.
A very easy solution—bridge loans!
A bridge loan is a short-term loan used until a person sells the home to help provide immediate cash. Essentially, you are taking the equity from your home and using it as a cash towards your next home purchase. This allows you to close on your new home with ease and take your time moving or selling your previous home with less stress. You may have also heard this loan referred to as a swing loan, interim financing, or gap financing.
BRidge loans explained
You can borrow up to 90% of the equity in your home. The value will be determined off an appraisal or the current tax value of your home. A bridge loan is typically structured as an interest only loan–you are only required to make interest payments on the loan, when your home sells, this loan will automatically be paid off at closing. This loan is typically allowed for up to one year during the transition of selling the home.
If you’re curious if this is an option for you and your family, I would love to connect and run scenarios for you! Below Jen and I discuss Bridge Loans and their importance in real estate investing.
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ALLISON Larson OF NOVUS HOME MORTGAGE
Allison’s social character is what drives her to build such a strong foundation with her clients from day one. She believes fostering current relationships, while continuously extending a hand to new affiliations is what keeps her professional life successful and exciting. By creating an environment where people feel comfortable asking questions and expressing their housing goals, she’s able to cater her methods to each unique individual.
Allison leads the Novus Home Mortgage team of local mortgage experts, and is always open to connect and provide advice Follow along with @mplsmademortgage on Instagram, or at allisonlarsonloans.com.
Investor // Landlord and DIYer // Realtor // Business Consultant // Globe Trotter // Converting Vegan.
