While owning a home is an asset, there may come a time when you will have to move. Depending on your situation as at that time, you may need to upgrade or downsize. And you will want to sell your current home and buy a new one.
For many homeowners, it may make more financial sense to use the equity they take from their existing home, in purchasing a new one. If you find yourself in a situation where the closing date as you sell your home, comes after the closing date of buying your new home, Bridge Financing Mortgage could be your solution.
It applies especially when your down payment is tied up in the equity. Which lenders do you go to? Get yourself a reliable and expert mortgage broker. We at GT Mortgages also specialize in Bridge Financing Mortgages. Feel free to contact us.
How Does It Work
Bridge loans are typical, especially in all the Big Banks. And not all small lenders may be able to offer you bridge financing. If you find a lender who gives Bridge financing mortgages, they typically:
• Lend up to $200000 for a maximum of 120 days. For those who may need a longer time or a more substantial amount, the lender will require more work to evaluate your case.
• Often, the lender will not need to register a lien on the property, as the loan is short-term. If you get a loan for a longer term or a more significant sum, the lender may need a lien. It will increase your costs due to the added legal fees.
• It has some interest.
• You need to provide the Purchase Agreement for the home that you want to buy and the Sale Agreement for your existing home.
Calculation
Say, you have 90 days until the closing date of your current home, however, the closing date for your new home is in 35 days. Getting a bridge loan will cover the difference in the closing dates, i.e.
90 -35 = 55 days
A bridge loan will provide you with the difference between your total down payment that you would like to put down, and the deposit you make.
5% deposit = 5% (Purchasing price of the home)
Bridge Financing= Total Down payment – Deposit.
If you need Bridge Financing and don’t know where to look, GT Mortgages is here for you. Contact us for your Bridge Financing Mortgage solutions.
