Quick Bridging Loans Make The Property Dealing Easier
Quick bridging loans can make your property deals much easier. This type of loan is advanced to fill the gap occurring during the time when you are selling a property and buying a property. They are secured against one’s property to be sold or the property to be bought and therefore are cheap loans since they qualify for the best loan rates. Your lawyer will make the arrangements for processing the funds to ensure they are delivered to the lawyer of the seller of the home you are buying. These quick bridging loans can be arranged quickly by applying online and providing all of the necessary information. Many people use bridge loans when they buy a home and we will discuss bridge loans, what they are and when you would use them in more detail.
What is a Bridge Loan
Often there is a gap in time between the time when the proceeds of the sale of your current home are available and when they are needed to place towards the home you are purchasing. Some consumers will arrange to be able to take possession of their new home a month before their old home sale closes. They do this to allow for time to move, sometimes to redecorate, to replace flooring etc. They can move at their leisure and take the time to decorate their new home they way want to. When a consumer takes this approach they essentially own two homes at the same time and they are paying on two mortgages at the same time.
In addition the money that they would normally place as a down payment on a new home is coming from the cash they are going to get out of their old house when the sale closes a month later. There is this one month period where they need to have a bridge loan that covers the down payment until the sale of their old home closes. This is typically a secured loan since it is registered against their new home and they can usually negotiate a low interest rate as a result. Once the sale of their old home closes and the money from their old home is available, the consumer’s lawyer will arrange to forward the excess proceeds to the lender of the bridge loan and remove the lien that has been placed against the home. If this all sounds complicated, your real estate agent, your lawyer or your lender can help you understand the process and how much your bridge loan will cost you to gain that month of time where you own two homes.
What Does a Bridge Loan Cost
Aside from the interest charged for a bridge loan, there can be a number of other fees that will be required. There will be legal fees for arranging the loan, and removing the bridge loan later. There may be also processing fees from the lender unless you are able to negotiate these as part of the overall deal. Since bridge loans are usually secured, the interest rate will be quite low in most cases.
Overall quick bridge loans make property dealing easier especially when you want to provide time for your move and to redecorate a home before you move in. When there is no furniture in the home, it is much easier to paint or replace flooring than it would be after all your furniture is in the home.
Consumers can apply for quick bridging loans online or with their mortgage holder. If you are applying for a mortgage online and feel that you will need a bridge loan as well, apply for both loans at the same time. Processing of the loan will be quicker and the lender may provide a better deal due to the additional business that you are bringing to the lender. The time to negotiate is during the application phase especially if you have a good credit rating.
Using a Broker for Help Arranging Bridge Loans
There are lots of details that most consumers who are purchasing a home are dealing with. Everything from hiring movers, arranging for all of the utility accounts to be transferred, dealing with contractors if you are making changes to the new home and probably going to work at the same time. In addition, your knowledge about mortgages and in particular bridge loans may not be as complete as you would like. Consumers can benefit from working with a broker who understands mortgages, bridge loans and all of the options available to a consumer.
In addition a broker makes it there job to be well informed on which lender is offering the best rates and terms for mortgages and loans in general. They can save the consumer a great deal of time. The consumer otherwise would have to check themselves at various banks and lenders to find out what rates and terms are available and then decide which one they want to negotiate with. The broker can do all of this for them and in most situations obtain a much better rate than the consumers local bank is willing to offer.
Brokers make their money when they arrange bridge loans and mortgages. The lender pays them a finder’s fee and there is no cost to the consumer for there efforts.
The bottom line is that a broker can make the task of arranging for a bridge loan much easier and the transfer or property dealing much easier for the consumer. If you are considering buying a home and arranging for an overlap of the two homes, your current home and your new home, then a bridge loan can make life easier and a lot simpler.
Arranging for A Bridge Loan Before You Sell Your Current Home
Some consumers are so confident about selling their current home, that they will purchase a new home before they have actually sold their existing home. This increases the risk for the consumer and may require them to pay a mortgage on two homes for a longer period than otherwise planned. They may need a bridge loan if they do not have savings to be used as the down payment for the new home and they may have to carry the mortgage on their existing home, the mortgage on their new home and the bridge loan for some time. While a bridge loan facilitates this situation, consumers should be very careful in these situations to ensure they are able to handle the three loans at the same time for a longer period.