Do You Want to Buy First and then Sell After ? Bridge Financing May Be the Answer!
Bridge Financing or Collateral Based Financing is a form of financing that allows a buyer of property to buy first (and close) and then sell their existing property later. This allows them to make the strongest offer possible in a seller’s market often times without a loan contingency. Once they sell their property, they can pay down any debts they owe and pocket the remaining funds as applicable.
There are several ways to accomplish this and I have included them below:
- 1st Option – Obtain a Line of Credit on current property to pay cash or use the line for the down payment of the new property.
- 2nd Option – Do a Cashout Refinance and use that cash for the down payment or outright purchase.
- 3rd Option – Get a Mortgage on Both Properties using A Paper (loans with the lowest rates)) that provides the necessary money to pay “cash” for the purchase with a closing of 30 days or less. Then once the exiting property is sold, the proceeds from that sale pay down purchase money loan leaving you with a loan based on your overall equity and loan you desire or qualify for.
- 4th Option – Apply for a Mortgage on Both Properties using B Paper (loans with higher rates)) that provides the necessary money to pay “cash” for the purchase with a closing of 15 days or less. Then once the exiting property is sold, the proceeds from that sale pay down purchase money loan leaving you with a loan based on your overall equity and loan you desire or qualify for.
Each of these have pro’s and cons. In order to determine which one is best for you, please complete the following and I will provide , your client qualifies for and is in their best interest, it is best to have them complete the following at:
Any questions, please contact me. Thanks.
Senior Mortgage Advisor
408-377-4123 o 650-465-8957 c 408-608-1921 f
101 Loan – 6020 Hellyer Ave #150, San Jose, CA 95138
CA DRE #01165697 NMLS #121019
- Residential Financing for Purchases and Refinances on 1 to 4 unit properties.
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