How To Use a Texas Bridge Loan To Make Your Dreams Come True

If you are trying to buy and sell a home at the same time, a Texas bridge loan can be a valuable
tool to have. This type of short term learn can help make sure that you get
your dream home with very few risks.

A Texas bridge loan is a
specialized short term loan that can be useful for real estate transactions. It
is a short term loan that allows you to use the equity in your current home as
a down payment on a new home before your current home sells. As the name
implies, a Texas bridge loan is
designed to “bridge” the gap by giving you funds for a down payment. The loan
is paid back with the proceeds from you home sale.

An Arizona bridge loan is a
valuable tool because most buyers rely on the sale of their current home to
come up with the down payment for their new home, however, it is not always
feasible or ideal to close on the current home first. In a perfect world, you
close on your home in the morning, have funds available by noon and close on
your second home before the business day is over. But it very rarely works this
way. More often, you close on your current home and have to find a short term
rental for a month or two before you close on a new home. This is not only
expensive, but it causes you to have to move twice and you are literally
throwing money away by renting.

One solution to the problem is an Texas bridge loan. A bridge loan bridges the gap by lending you the down payment
for a new home that you then pay back once your home sells. The bridge loan is
secured to the buyer’s existing home. The funds from the bridge loan are then
used as a down payment on the new home. Bridge loans are gaining in popularity
as a down payment option because they offer flexible terms and are relatively
easy to qualify for. Also, many lenders will not allow you to take out a home
equity loan on a home that is listed for sale, so in many cases a bridge loan
is the only option to come up with cash for a down payment.

7 Things to Consider if You are Thinking About a Texas Bridge Loan

Like any loan, a bridge loan has certain risks and benefits. Knowing
all your options and going into it fully informed will help you risk less and
benefit more. Here are five important things to keep in mind if you are
thinking about getting an Texas bridge
loan.

1. You will pay a higher interest rate. Like many
short term loans, bridge loans have higher interest rates than 30 year loans.
You usually have a grace period of 1 to 4 months depending on your loan terms
and if you pay the loan back with proceeds from your home sale, you can usually
avoid paying a lot of interest.

2. Qualification is usually an easy and painless
process. Most lenders do not have set FICO scores or debt to income ratios for
bridge loans. Instead, qualification is based on a complete picture of your
finances and whether it makes sense to purchase a home before you sell your
current one.

3.
A bridge loan can save you money. If you wait to
purchase your new home until your old home sells, you may end up needing a
short term rental. This is literally throwing money down the drain. Getting the
right Texas bridge loan and
selling your current home quickly can actually save you quite a bit of money.

4.
There will be fees. An Texas bridge loan has several fees associated with it. You will
pay an administration fee of about $750 and an appraisal fee on your current
home to ensure it is worth what you need to sell it for. In addition, you will
pay wire fees, origination fees, and points which will be dependent on the
amount of your loan. When all is said and done you will probably end up paying
about $2,000 to secure your bridge loan.

5.
You can find your new dream home without the
stress of having to sell your existing home first. You don’t have to wait or
make unattractive contingency offers. You can purchase your new home
immediately which will usually get you a better price and help make sure you get
the home you want.

6.
You have to be able to qualify for two
mortgages. A bridge loan can help you with a down payment, but you will still
need to qualify for two mortgages and be able to make monthly payments on both
if push comes to shove. However, most mortgages don’t require a payment for the
first month so if you sell your home quickly, you can usually avoid double
payments.

7.
A bridge loan can cause stress. If your current
home does not sell quickly, you will end up paying the mortgage on it, the
mortgage on your new home, and the payment on your bridge loan. Make sure to
carefully evaluate your finances to ensure that you can make your payments for
a short time if you need to. You can also help eliminate financial stress by
pricing your current home to sell quickly.

Once
you have evaluated the pros and cons of an Texas bridge loan, contact the financial professionals at Level 4 Funding to get
your application started!

The sooner you apply for your bridge
loan, the sooner you can get cash in hand for your down payment. Don’t let your
dream home slip away because you are waiting for your current home to sell.
Find out the benefits of bridge loans today!