Sonia Rollins
EXIT Premier Real Estate | 781-454-6043 | [email protected]


Posted by Sonia Rollins on 6/28/2020


Image by 3D Animation Production Company from Pixabay

Understanding the type of loan you're getting matters, to protect your financial interests. You also need to know when to choose one type of loan over another. So, should you choose a bridge loan? When might that be the best choice for getting into the home of your dreams? Here's what you need to know about this particular loan type.

What Are Bridge Loans?

Bridge loans typically provide temporary home financing, and are designed for use for six to 12 months. They carry an interest rate that is approximately two percent higher than a standard mortgage. These loans can "bridge" the gap between buying one property and selling another, allowing the borrower to get into a different home before their original home is sold and closed.

Who Can Receive a Loan Like This?

Anyone who owns a home and is trying to buy another one could potentially get a bridge loan. Just as with a traditional mortgage, though, you would have to qualify. Income and equity requirements must be met. There is also usually a debt-to-income ratio that's very important, since you'll have to make loan payments for a few months.

Why Would Someone Want a Bridge Loan?

When you're selling your home but you haven't found a buyer yet, you might find another home you want to buy. Since you don't have the funds from the sale of your current home, you wouldn't normally qualify to buy the other home. If you can get a bridge loan, though, you can buy the second home while still trying to sell the first one. When the first one sells and you receive the proceeds, you can use that money to pay off the bridge loan. Bridging that gap between the financing for the two homes can be vital in markets where housing is very competitive, or where you need to move quickly to purchase a particular home.

How to Get This Type of Loan

Getting a bridge loan involves talking to your bank or other lender, just like you would with another type of loan. Not all lenders offer bridge loans, so it's important to shop around. Additionally, your real estate agent can be a great resource when it comes to finding a bridge loan. Some agents even partner with lenders for these kinds of loans, to give their clients more options.

If you're not sure whether a bridge loan is the right choice for your home buying and selling needs, talking to your lender and real estate agent can help. There are times when borrowing additional money isn't a good choice, but these kinds of loans can also be very beneficial in certain real estate circumstances.




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Posted by Sonia Rollins on 3/12/2017

One of the requirements of buying a home is for the buyer to provide a down payment equal to somewhere between 3 and 20% of the price of the home being purchased. The reasons behind a down payment may have seemed a bit arbitrary up to this point. Home buyers know they need a down payment, but just how important a down payment is can often be overlooked. Once itís all explained here, it will make a ton of sense to all first-time home buyers. Why Is A Down Payment Important? The larger the amount of the down payment that you can provide, the better it will be for your home loan status. The amount of the down payment provided will affect the type of loan that you get the and amount of the loan that you get for the house you buy. For any down payment that is less than 20% of the purchase price of the home, youíll need to get PMI (private mortgage insurance). A smaller down payment may also mean that less of the closing costs will be covered up front. This is definitely something to look into because long term, it may not be a wise decision financially. Think of the down payment as the foundation of the biggest purchase youíll ever make. Check Your Finances If youíre not able to save up for a down payment, it may not be the best time for you to buy a house. The mortgage process makes you take a step back and really check out your finances. Buying a home is a huge financial commitment. If youíre unable to save properly for a down payment, you may not be ready to commit to buying a home. If you havenít been able to save up enough for a down payment, you may not be financially ready to buy a home. Itís a great way to take a look at your financial health when youíre thinking about acquiring a mortgage. A small down payment means that youíre eligible for fewer types of mortgages. Typically a down payment of 5% or less limits you to only a few different kinds of mortgages. This is important to keep in mind when planing your financial future. Also, keep in mind that the larger the down payment, the more keen lenders will be on actually granting you a loan. Renting Could Help You In The Long Term The thought of continuing to a rent over buy a home could be stressful for you. In the long term, however, itís much better to continue paying rent than to risk losing your home due to foreclosure. Being unable to make mortgage payments is a serious thing. The entire process of buying a home starts in acquiring for the down payment.




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