A bridge loan helps a potential homebuyer who wants to buy a new home before selling their current home. Most homebuyers plan to use the proceeds from selling an existing home as a down payment for a new home. Therefore, they will include this stipulation in the purchase and sale agreement when submitting an offer as a home sale contingency. However, some Connecticut Homebuyers desperate to win the bidding war for the limited supply of homes are waving contingencies. A bridge loan can eliminate the need to waive the home sale contingency.
At Mortgage Equity Partners-Glastonbury, our bridge loan program or Instant Equity Loan Program allows homebuyers to purchase a new primary residence using the equity in their current home for the down payment and closing costs making their offer more competitive.
MEP’s Instant Equity program is a type of short-term financing that helps you “bridge” the financial gap between the time it takes to sell your present home and buy a new one.
“We were able to get the funds for the down payment and closing costs using the MEP’s Instant Equity/Bridge Loan Program, and my borrowers finally got a home they loved after many months of searching! My borrowers were looking in Glastonbury, West Hartford, and Farmington, where the competition was fierce. However, using the Instant Equity/Bridge Loan Program and waiving the home sale contingency, their offer became more competitive, and they got the house they wanted,” said Jennifer Barone, Mortgage Loan Officer located in the Glastonbury office.
How does MEP’s Instant Equity/Bridge Loan work?
MEP’s Instant Equity/Bridge Loan uses your current home as collateral for a type of “second mortgage” for the down payment and closing costs on a new home. A borrower will often pay the loan off quickly once their home sells with no prepayment penalties.
Positives:
- Perfect for a seller’s market. It makes a buyer’s offer more competitive by removing contingencies.
- It may help avoid Private Mortgage Insurance (PMI) by putting down 20% or more for a down payment.
- Quick financing. It can be faster to qualify for an Instant Equity/Bridge Loan. In addition, you already have the application process started when you apply for your first mortgage.
Negatives:
- Rates can sometimes be higher than most conventional loans but keep in mind this is a short-term loan.
- Must meet lender requirements for qualifying.
Working with Mortgage Equity Partners Glastonbury for an Instant Equity/Bridge Loan is easy because our local underwriting team approves all these loans in-house. Remember that not all lenders offer an Instant Equity/Bridge Loan program. An Instant Equity/Bridge Loan is a value-added service for MEP borrowers in Connecticut designed to make them more competitive in the current market.
Taking advantage of our Instant Equity/Bridge Loan Program may be the best strategy when you want to waive the home sale contingency. Contact our loan officers to determine if an Instant Equity/Bridge Loan is right for you.
