How Can a Bridge Loan Help You?

bridge loansOne of the things many people just don’t know about is that when you’re selling a home and trying to buy one at the same time, you won’t always have to wait for the house to sell before you can buy. With a bridge loan and a good Toronto mortgage broker you’ll be able to get into your home faster than ever. You shouldn’t have to wait just to get into a house, and you won’t have to as long as you work with the right people. Here we’re going to go over what a bridge loan is, how you can get one and if it’s the right thing for your situation.

What is a Bridge Loan?

Bridge loans are just what they sound like: a bridge in financing. Say you’re buying a home (while you have another on the market for sale, this is important!) and you have your down payment and financing… but somehow the numbers don’t match up. In most cases this would mean that you would have to cancel buying a home and lose all of the money you’ve put in so far.

But with a bridge loan and a smart Toronto mortgage broker (don’t do it without one!) you could end up in your new home before you even sell your first one. You’ll be able to bridge the gap in financing to get into the home of your dreams, but you’re going to want to make sure that this is the right type of financing for you. This means going over different options like a better mortgage or different types of hard money loans.

What are the Pitfalls of a Bridge Loan?

No financing is completely golden, and there is one serious drawback to a bridge loan: three mortgages at once. You’ll effective be paying the mortgage on your old property, your new property and servicing the interest on your loan to bridge the financing. If you don’t think you’ll be able to sell your home in time, talk to your real estate agent and see what your options are. You could always try and rent out the property while you’re trying to sell it. You’re going to want to make sure that you can service this kind of debt; it wouldn’t be the first time that someone went under because they didn’t understand their financing.

Is a Bridge Loan Right for You?

If you want to be able to move into a new home before you sell your first one, you’ll be able to with a bridge loan. You’ll want to take a serious look at your finances and talk with a mortgage broker before you rush into anything. That bridge loan is going to be there tomorrow, it won’t hurt you to do your research and see what you’ll be getting into. Think about what a bridge loan would mean for your monthly and long term finance plan. Think about saving up money instead. Whatever you do, talk with a  mortgage broker and see how it’ll work out for you. Click here to learn more about our great bridge loans today!

Three Things You Need to Know about Bridge Loans

bridge loansBridge loans are a great way to get the money that you need to buy a new home before your current one sells, but you’re going to want a Toronto mortgage broker to help you out! There are things you’ll need to know before you get one, and here we’re going to explore what bridge loans are and what they’re not. Let’s get started and see if they’re the right kind of financing for you!

What is a Bridge Loan?

A bridge loan effectively “bridges” the gap in financing that you need to get a new home. You’re going to have to be in the process of selling a home right now while buy a new one. If you’re just trying to sell or buy a new home, you won’t qualify for a bridge mortgage. Bridge loans are tricky, and you’ll need to be able to show lenders that you are financially capable of paying the mortgage. These are short term financing solutions, so the interest can run a little high. They will help you through escrow though and get you where you need to be.

How do Bridge Loans Work?

Bridge loans work like this:

You are buying a new home and trying to sell your old one. The home you own now may not have closed escrow yet, but you need to meet a deadline to buy your new home. A bridge loan will be able to help you make that deadline. The repayment times for this kind of loan will generally be less than a year, so keep this in mind before you borrow. This way you won’t get any surprises or make financing mistakes that will only come back to bite you later.

If you don’t want to take out a bridge loan, think about finding a lender who can give you a mortgage with more money and better terms instead. This is why it’s so important to work with a Toronto mortgage broker that understands your needs. You’re going to need that extra help to ensure that you’re getting the mortgage that fits YOU and not the other way around.

What are the Downsides of a Bridge Loan?

The downside of a bridge loan boils down to whether or not you can afford one. You’ll technically have three mortgages all at the same time; the note on your current home, the note on your new home and this bridge mortgage loan to worry about. This can be a serious problem if done wrong, so you’re going to want to talk to a Toronto mortgage broker before you choose this as your financing option. They’ll be able to help you evaluate the GFEs (good faith estimates) offered by the lenders. These will help you figure out if a lender is actually offering you a good smart deal in the long term or if they’re trying to pull a fast one on you. Visit our bridge loan page today to learn more!.

A Look at Bridge Financing

A Look at Bridge Financing

Selling one home and using the proceeds to fund the purchase of another is not uncommon. But what if your new home purchase is closing before the old one’s being sold off?

You will definitely need a short-term financing solution to aid your purchase. Here’s where bridge financing comes in.

Bridge financing gives you access to a short-term loan against the equity of the home you are selling. Once the sale of your home is complete, this loan gets paid. The home’s equity is calculated by deducting the costs of paying off current secured credit lines and/or mortgages, legal fees and commissions, from its sale price. You can get a bridge loan from the lender/bank that is providing you with the mortgage for your new home.

The interest rates on bridge loans are typically one to three percentage points higher than bank’s prime lending rates.

If you are buying and selling on the same day, it is best to have a bridge or some sort of interim financing in place. This is especially true if the buyer:

  • has put down a small deposit
  • is buying a home for the first time
  • requires a first and second mortgage

At a time when there is a rush of young first-time buyers, there is a greater likelihood of them taking a longer time to meet mortgage conditions. So it is advisable that you have some funding solution that you can turn to when you plan to buy and sell your home simultaneously.

Get Into a New Home with a Bridge Mortgage

bridge mortgagesGetting into a new home with a bridge mortgage is easy, but what are they and how do they work? Just like with every other kind of mortgage, you’re going to want to talk with one of our Toronto mortgage brokers to make sure that what you’re doing makes financial sense for you! We work for you, not for the banks; you’ll always have someone on your side to help you make sure you’re getting the best deal on your bridge mortgage. Here we’re going to go over how bridge mortgages work, so let’s get started!

What is a Bridge Mortgage?

A bridge mortgage helps you bridge the gap in your financing when buying a home; it’s important to note that you will have to be in the process of selling your home while trying to build a new one. You can’t try and buy a new home that’s outside of your price range if you don’t have another home for sale. That’s why it’s called a bridge, but it should be thought of as more of a trampoline. It’ll give you enough time to bounce to get your previous home sold. You’re going to want to work with one of our Toronto mortgage brokers to make sure that a bridge mortgage is right for you.

Can a Bridge Mortgage Help You?

With a bridge mortgage you’ll be able to get into a house that you couldn’t have otherwise, but they’re not right for everyone. You’ll want to speak with a professional who can help you objectively evaluate your situation to make sure that you’re doing the right thing. Sometimes a bridge mortgage can hurt your situation more than it could help, and you may just want to find a different lender that will give you the money you need outright. There are so many different ways to fund a home buy and sale, it’s important that you explore all of your options before you settle on just one.

What Should You Choose?

Every situation is different, so you’ll need to talk to a professional to make sure that you’re getting the right information. Your lender may be offering you a bridge mortgage right now, but how do you know it’s the right one? What’s the lifetime cap, what’s the interest rate, what kinds of penalties are attached to the mortgage? What happens if you’re not able to sell your home in one month, three months, six months? You have to know the answers to the questions before you even consider signing on.

When you work with one of our Toronto mortgage brokers, you’ll be able to find out exactly what you need to do to meet your financing gap. Sometimes you’ll need a bridge loan, other times you may need to just find a better lender who can offer you more money and help you avoid the problems of a bridge mortgage.

Pay Off Your Old Home with a Bridge Mortgage

bridge mortgageIf you want to pay off your old home and buy a new one, a bridge mortgage may be the solution you’ve been looking for! It’s important to think about what a bridge mortgage really is and if you’re going to be able to really reap the benefits of this kind of financing. Also known as “hard money lending”, a bridge mortgage gives the borrower the opportunity to buy one property while the other is still on the market. It is intended to be a short term solution and to be repaid quickly.

How do Bridge Mortgages Work?

This is the situation in which a typical bridge mortgage works:

You have a home on the market that you’re currently trying to sell. You’ve been looking for a house and you’ve finally found one. You aren’t able to sell the house in time to buy the new one, and you need to bridge the gap in your financing. Your bank can only give you so much for the next house and you don’t have enough to cover the down payment. This is where a bridge mortgage comes in handy!

With a bridge mortgage you’ll be able to fill in the holes in financing and be in your home a lot quicker than waiting for your old home to sell. The downside to this is that you could effectively wind up with 3 mortgages at the same time. A bridge mortgage is a short term financial solution, and you’re going to need to make sure that you don’t let the debt linger. You’ll want to talk with one of our Toronto mortgage brokers to see if this really is the kind of financing that fits you.

Now is the Time to Buy

The real estate market in booming in Toronto and the surrounding areas (GTA), and you’ll be able to find a home and sell it quickly. By next year you may find yourself in an entirely different situation, so you’ll want to take advantage of good circumstances while they’re here. You don’t want to let an opportunity pass you by because you’re not sure what course to take. If you want to sell your home and buy a new one, while getting in on some of the lowest interest rates in Canadian history, now is the time to do it.

Get the Best Deal Possible

Getting the best deal on a bridge mortgage means working with a mortgage broker! But you don’t want just any mortgage broker, you want someone with experience and connections who can ensure that you get the best deal possible. From the lowest interest rate to getting the best loan amount and repayment terms, we’ll help you get what you need. There are many different kinds of lenders who offer this kind of financing, and you’ll want to make sure you choose wisely. If you’d like to know what we can do for you, contact us for a free consultation today.

ahead and talk with one of our Toronto mortgage brokers and see what you can do to get financing.

 

Why are More Homeowners Seeking Bridge Mortgages?

bridge mortgagesMore and more homeowners are looking for bridge mortgages to buy a home when they’re not liquid, but why? What can we do for you as a Toronto mortgage broker? What do you need to get a bridge loan? What are they anyway? All these questions and more will be answered here. You want to make sure that you really know what you’re getting into before you get started. It’s always a little risky when it comes to taking out a mortgage, so you need to know that you’re ready and that it’s time to get started.

What is a bridge mortgage?

Let’s say you have a home. You’ve paid off most of your first mortgage and you still have a little to go on your second mortgage. You have a good bit of equity stashed away and you’re trying to sell your home. You’re buying a new home but your old home won’t be sold in time to cover your down payment… what can you do? With a bridge loan you’ll be able to pay off the home and then repay the mortgage as soon as your first home is sold.

Is the Interest Tax Deductible?

The interest on a bridge mortgage MAY be tax deductible, but you’ll want to talk to one of our Canada mortgage brokers to find out for sure. It’s different in every situation and the length of time you’re paying plus how much you have to pay in interest will factor into how much you’re going to be able to deduct on your next taxes. Don’t just take out a bridge JUST because you think it’s something that you can get a tax write off for. Make sure you’re in the right headspace to get the mortgage that’s right for you.

Do You Really Need One?

If you can get a mortgage that will cover the entire cost of your home it would be better – that way you don’t have to pay closing costs on 2 mortgages instead of just the one. Less interest, less risk for losing your home if you just can’t pay it off – you’ll effectively have 3 mortgages running at once in tandem. The less you have to keep track of the better it’ll be for you. Talk with one of our Toronto mortgage brokers and really find out if this is the right option before you take the leap.

What’s the Alternative?

All in all, a bridge mortgage can be fantastic – but it’s good to have some alternatives ready. Think about talking to us to see if we’ll help you get a better deal on your bridge mortgage. Don’t just take a bridge because your lender is offering it to you. You want to always make sure you’re getting the lowest rate possible. Sure, you could always refinance but then you’ll have to pay thousands of dollars more to close all over again. 

How Much Will a Bridge Mortgage Really Cost You?

A Look at Bridge FinancingEveryone wants an easy transition between their first home and their second, but sometimes a bridge mortgage can cost you more than it’s worth. Here we’re going to talk about how bridge mortgages work and what happens when they don’t. If you don’t get the best terms from the outset it’s easy to end up with three mortgages running at the same time – leaving you at risk for losing 2 homes at the same time. Talk to your realtor about how long it’s going to take to sell your first home before you take a bridge loan to cover the cost of the second one. Every month the home remains empty is money down the drain.

How do Bridge Mortgages Work?

Here’s a great example:

You own a house you’re currently selling and you’re about to buy a brand new home. The buyer can’t close until the end of October, but you’re closing on your new home at the beginning of October. You need the money from your first home for the down payment. A bridge mortgage will help you bridge those gaps in financing. Most of the interest might end up being tax deductible.

When Bridge Mortgages Go Bad

Let’s say you want to take out a bridge loan but you’re not sure when you’re going to be able to sell your home. It could be 6 days from now or it could be 6 months; the longer you have to wait to repay the mortgage the worst off you’re going to be. These are short term high interest loans that are there until you’re liquid again… not just because you’re trying to buy something you can’t yet afford. You’re better off waiting to have the cash in hand if you’re going to have to wait any longer than three months to sell.

Getting a Better Bridge Loan

Working with one of our Toronto mortgage brokers you’re going to get a bridge mortgage you can live with now and later. We know how important it is to keep a hold on your equity – plus who wants to have to pay three mortgages at the same time? If we can’t find you a better deal on a bridge mortgage we’ll help you find a mortgage that will give you the money you need to buy a home without one.

Always Know the Cost

Before signing on for any kind of loan or mortgage, you have to know what you’re getting into. Don’t just take the lender’s word for it. We’ll help you understand the terms and if they’re fair; if we can find you a better deal somewhere else we will. It’s so important to work with a Toronto mortgage broker like us to find out what kind of deal you can get before you sign on for one. Don’t take on a bridge mortgage because your lender offers you one – know that the deal you’re getting is the right one for you!

To learn more about our great rates on bridge mortgages, click here!