Home Bridge Loan Article

Home bridge loans are used when a prospective homebuyer has found the home they would like to purchase, but has not yet sold their current one. Qualifying for this depends on how much equity there is in the current home. If the equity is adequate, a home bridge loan can provide the homebuyer with the cash needed to make a down payment on the new home. Normally, the interest rates and mortgage points are very high, not to mention the costs and fees involved. Less expense alternatives to this type of financing include 401k funds, stocks or bonds, an insurance policy or another asset that can be borrowed against, even an automobile. Any physical or financial asset that can be secured would work. In addition, a "gift" from a family member can be used to make up for a shortfall in funds. If none of those resources are available, a home bridge loan may be the only option for purchasing that new residence before the current one has sold. The least amount needed to close on the purchase of the new residence is usually the maximum amount allowed of most home bridge loans.