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Pawleys Island Real Estate Homes
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Bridge Financing, What is it?

So if you want to finance a new home in Pawleys Island and you still have a loan on an existing home you own but plan to sell, you are likely to run into the term bridge financing.  This is a special type of financing that can help solve the cash flow problems created by the need to complete the purchase of one home before you complete the sale of the other.

Bridge loans are temporary loans that bridge the gap between the sales price of a new home and a home buyer’s new mortgage, in the event the buyer’s home has not yet sold. Your mortgage lender will be your go to person when dealing with this type of loan, but here are some key points from Pawleys Island Real Estate.

 

for sale

Moving into a new home? If your existing home hasn’t sold, it may be worth looking at bridge financing!

 

 

 

 

 

 

 

 

 

 

Filling In The Gap

 

It can be difficult to get the sale of your current home to coincide perfectly with the purchase of the new one in order to avoid a problem with cash flow.  If you have a sale closing in 90 days on the old home, but find that you need a short escrow to close the deal on the new home, this can create a gap in cash flow.

 

Bridge financing allows you to close that gap and provides for the time period between the new purchase and the sale that will eventually provide the needed cash for that purchase.

 

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Bridge financing helps you get from one house to the next!

 

 

 

 

 

 

 

 

 

Down Payments And More

 

Most people don’t have enough cash on hand to pay the down payment on a new home prior to closing on the sale of the previous home.  This can make it difficult for buying a home in Pawleys Island you want when you haven’t yet sold your current home or are still in escrow.

 

Bridge financing allows you to make the purchase by covering down payments or other costs involved as part of the loan process.  It will cover the difference on the expectation of payment in the near future.

 

Qualifying For Bridge Financing

 

Not every purchase transaction will qualify for bridge financing.  In addition to credit requirements, you will need to have a strong expectation of the cash coming in to fund the new loan.  Bridge financing doesn’t guarantee that either loan will go through, and a problem with one loan can usually mean a problem with both.  It is rare to obtain open bridge financing where there is no certain date for the assets to become liquid, since this comes at a high risk.

 

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You can purchase the home you really, really want….but still be able to wait a little longer for the old, or current one to sell.

 

 

 

 

 

 

 

 

 

 

In most cases bridge financing is only used for a very short period of time.  Your mortgage expert can explain the details to you and let you know if bridge financing is an option for your situation.

 

For many people, this type of financing can make all the difference in the ability to purchase the home they really want while still waiting on the sale of a previous home.

 

Melissa Keller, Realtor in Pawleys Island

 

 

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Pawleys Island Real Estate Homes