There are more options for borrowers every year

Most often, a bridge loan is used to pay off the existing mortgage, with the remainder (minus closing costs and prepaid interest) going toward the down payment on the new home. What to do?The real estate agent advises that you could make what's called a contingent offer; buying the new house is 'contingent' on you selling the old one. It pays to take the time to understand what you're getting into.Usually people who take out a bridge loan will use the funds to pay off the old mortgage while putting the rest towards the new home's down payment, first deducting any closing costs and prepaid interest.A bridge loan bridges the gap between the two transactions and is often the difference between getting the house of your dreams and missing out entirely.

In a perfect world you would have your house on the market will potential buyers making offers before you make any offers yourself.Typically, the loan is structured with a relatively short term, usually six months to a year, and hefty prepaid interest. You call up the real estate agent and make an appointment to go see what the market has to offer. If you're willing to pay the higher rates and fees that come with a bridge loan you can buy yourself some extra time.So you're thinking of getting into a bigger house. The borrower typically must begin making these payments after six months if the house still hasn't sold. It's everything you've ever wanted in a home unless your married, in which case it's everything your wife has ever wanted in a home.

Before you do anything talk to someone who has experience in the financing side of the real estate market.Because of the risk involved in making a loan on collateral with only possible future value (the future sale of the old house), most lenders charge high interest rates on their bridge loans. If after six months the old home has not sold, the borrower begins making interest-only payments on the loan. This can save you a considerable amount of money. You haven't even put your old house on the market yet. Bridge loans can also be setup to completely pay off the old mortgage or to add the new mortgage to your current debt.While a bridge loan can get you the house you want when you want it, it can be a pricey option in the long run.

There are more options for borrowers every year shipping container school and consequently the process gradually gets more complicated.But before you give up all hope of getting into the home you want, first consider a bridge loan. Then you find it, the perfect move-up home.Oops, says the agent, Your old home isn't even listed yet? You may have wanted to do that before we went house hunting. When the home eventually sells, the bridge loan is paid off; if the house sells with in six months, all uneaed interests are credited to the borrower.About the AuthorCameron Brown is an inteet marketer specializing in ranking automation. However, because of fluctuating market conditions, getting the timing right can be difficult.

If it's an option for you, it may be a better idea to borrow against assets such as stocks or your 401(k). For information on how a bridge loan can benefit you, visit Security National Capital.A bridge loan is a form of second trust that is collateralized by your present home in a manner that allows the proceeds to be used for closing on a new house before the old house is sold.You'd make an offer right then and there but realize you need to sell your old home before you can by this one. Your offer is a little too 'contingent' for most sellers?they probably won't take it