Bridge loans, also called swing loans, make it possible for people to finance new homes before they sell the home they are currently living in. If you can afford bridge loans in Boston, MA, they might be able to give you an edge in the housing market.
Basic Information About Bridge Loans
- Bridge loans require that you have a 20% equity in your current home.
- Most have six-month or 12-month terms.
- They have high-interest rates and fees.
- They are great options for areas that have homes that sell pretty quickly.
What Are Bridge Loans?
Bridge loans essentially give you the option to use more time in between transactions. This works by letting you access your home equity before you actually sell it. This can also help you avoid making a contingent offer on the place that you’re interested in purchasing. Offers that are sale-contingent let you get out of the contract if your current home fails to sell.
What Are the Advantages of Bridge Loans?
There are two main advantages of getting bridge loans in Boston, MA.
- You will be able to make an offer on the house you’re interested in purchasing without using a sale contingency.
- Until you sell, payments might be deferred or interest-only.
When Should You Use a Bridge Loan?
You should only consider using a bridge loan if you find yourself in a very sticky situation and need help keeping things on track. This is usually when sellers in your area are refusing to accept contingent offers or if you can’t afford a down payment without using the proceeds from the home you already live in.
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