Potential homebuyers in the current real estate market may find themselves stressed when trying to negotiate a competitive offer to purchase a new home. The market heavily favors the seller, so homebuyers need a competitive edge to set them apart. For this reason, Mortgage Equity Partners created our custom Bridge Loan Program, MEP’s Instant Equity Loan Program. The Instant Equity Loan Program allows you to purchase a new primary residence using the equity in your current home for the down payment and closing costs while removing the home sale contingency from your offer.
A contingency clause gives a party to a contract the right to back out of a deal for a specific reason. For example, buyers frequently want a contingency clause in the purchase and sale agreement, allowing them to terminate the contract should their primary residence not sell. However, sellers do not like contingencies. With the Instant Equity Program, you can remove home sale contingency, making your offer more competitive.
MEP’s Instant Equity Program is a bridge loan that allows you to borrow money for a new property while waiting to sell the old one, using your current home as collateral. It 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.
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 for a bridge loan is easy because our local underwriting team approves all these loans in-house. Remember that not all lenders offer a bridge loan program. Our Instant Equity Loan Program is a value-added service for MEP borrowers to help them purchase a new home in a super-competitive market.
Taking advantage of our Instant Equity/Bridge Loan Program may be the best strategy when you have to sell your current home. Contact us today to find out if an Instant Equity/Bridge Loan is right for you.
