Homeowners selling and buying simulataneously can face challenges with reconciling both events, especially in competitive real estate environments. Bridge loans may be a effective solution to this dilemma. The information that follows on Las Vegas bridge loans - what are bridge loans will help you evaluate this financing option.
Las Vegas Bridge Loans - What Are Bridge Loans
Many homeowners have equity in their existing real estate. There may be a gap in the date those funds are available if a new property must be settled prior to the old home closing. Bridge loans are short term financing that bridge the gap. It is a substitute for home equity loans (since many banks do not approve home equity loans for homes on the market).
The review process and qualifications for bridge loans can be very different from conventional loans. Since bridge loans are for short periods of time, they are not normally submitted to the secondary mortgage market and as a result need not comply with the same provisions. Minimum credit scores, debt-to-income ratios, and other financial factors may differ among banks. During the time frame of the bridge loan, the borrower will essentially carry two home loans (one on the hoem listed for sale and one on the property purchased). Thus, the borrower must qualify to pay both.
Pros & Cons of Bridge Loans
Bridge loans enable individuals to buy and list without the added stress of multiple contingenies and requiring simultaneous closings. This can sometimes provide additional negotiation power or bring together transactions that can otherwise not work out. It can also make the moving process easier by eliminating the need for temporary storage in same-day closing situations. As a disadvantage, not all borrowers will qualify for bridge financing. They also have more fees than home equity loans. Buyers and sellers should weigh these advantages and disadvantages with the assistance of both real estate brokers and mortgage advisors.
The First Step
Whether you should consider a bridge loan should be based on your finances and home buying and selling situation. A local lender that provides bridge financing can give you more comprehensive information beyond the Las Vegas bridge loans - what are bridge loans shown above.