How to get a Bridge Loan for Real Estate Transactions
Bridge Loans are a great tool for homeowners and investors who DO NOT want to qualify based on Credit or Income Documentation who want to leverage the equity in their property to acquire a new opportunity where time is of the essence!
When & How to get a Bridge Loan
Sometimes you want to buy before you sell, meaning you don’t have the profit from the sale to apply to your new home’s down payment. This is a solution for that.
Real Estate Investors will use this loan as well for buying property when the timing is essential to making the deal work.
Speed, No Income Being Verified, and a Easy Process!
Introducing…The Bridge Loan.
A bridge loan is a short-term loan used to bridge the gap between buying a home and selling your previous one.
Example: Buyer’s home is 60 days out from selling, he has identified a property he wants to buy but, the seller does not want to wait for 60 days for the buyer’s house to sell. The bridge loan would allow the buyer to pull out the equity from his property needed to win the offer”
Bridge Loan Qualification Info
What Type of Credit Do I Need for this loan?
Generally, credit doesn’t play a role in qualifying for this loan. This is more of an equity-driven loan.
Liens on a credit profile can affect the cash out amount and interest rate.
What Income Information Do I Need to Provide?
Since this is an equity-based loan no income is being verified
- No tax returns needed
- No paystubs needed
- No employment verification needed
What other information would be needed for a loan like this?
- Copy of valid state ID
- A copy of your mortgage statement (if applicable)
- A copy of your homeowner’s insurance
- To protect the senior community a competency letter from a doctor may be required
Bridge Loan Details
Bridge Loans Close Fast!
Everything from underwriting to getting an appraisal just moves quicker with these loans. It’s not uncommon for these loan types to meet some very limited timelines.
For the right investment property, Speed Is King. This loan works great with those transactions that are time-sensitive!
How to get a Bridge Loan
The quickest way to get started with a bridge loan is to contact us! (insert shameless plug here).
But seriously, this loan is a niche product and can generally be found using a local mortgage broker. Big banks tend to shy away from these loans due to timing needs that a borrower will have.
Applying for a bridge loan is free. The only upfront costs a borrower can expect to pay are an appraisal fee to an appraiser, a document fee to the attorney drafting the loan papers (varies state-to-state), and a credit report fee. All other fees are generally rolled into the loan.
Bridge Loans are a great tool for homeowners and investors who want to leverage the equity in their property to acquire a new opportunity where time is of the essence!
Granted, a Bridge Loan is not a long-term solution for an investment property, but it sure does give savvy investors the momentum to establish ownership.
These loans have not only proven themselves over and over again in a competitive market but also have grown real estate portfolios nationwide.