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| I have found my new home but haven’t Sold my cur
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If you need to obtain financing for a new home, including a down payment, but your old home hasn’t sold yet and your funds are tied up, one option is to utilize an existing equity line of credit to make the down payment. This may be a viable option if your equity credit line already exists because it has been secured against your property and the loan will be paid off when the sale closes. However, the situation could become more complicated if your home remains unsold and larger loan payments become due, or if your home cannot be sold at a price that is sufficient to pay off all the existing loans.
Another option is called a bridge loan. The loan term is comparatively short (typically several weeks to several years), the interest rate is relatively high, and 2-4 points may be charged to the borrower. Most banks do not offer bridge loans because the speculative nature of the loan and other factors do not fit the bank’s lending criteria. Bridge loans are more likely to originate from individuals, investment pools, and loan companies.
Creative financing is a term that describes a broad range of options, such as getting loans that do not require a down payment, finding creative ways to maximize cash flow, or restructuring an entire deal. When you are making home buying or selling decisions that will affect your financial life for many years, it is a very good idea to consult with a reputable, experienced professional who knows the broad range of loan products that are available, and also understands your needs well enough to find the best option to meet your needs.
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Posted by gmcgowan on 2008-06-19 22:08:39 | Rating: | Views: 19
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