“Bridging the gap” is another way to refer to swing loans or, more commonly, Arizona Bridge Loans. The referral to any references the ability to borrow using the down payment on your current home, with the intention of using it to purchase the next. It is an option that allows people the freedom of contingencies in contracts that require that the current home be sold first. The transitional metaphor of moving from one home to the next as such is seen in the word “bridge.”
Benefits of Arizona Bridge Loan include a lack of major transition period between buying and selling your home, without having to utilize a temporary living space. Freedom is also found in the ability to search for homes with no limitations or pressure when the ideal home is found. These loans are also common solutions for small renovations or relocations. These benefits to the borrowers are contrasted by the benefits to the lenders which include high interest rates and short-term, low-risk repayment.
Qualifying for these loans means having a great credit score and low debt-to-income ratio. If you meet these requirements, you should also consider these other factors before diving right in. Eligibility is great, but eligibility for the loan doesn’t cover a few other things, which includes the fact that you will have to pay a mortgage for two properties. Not only that, but they are expected to be paid off in 6 to 12 months, which is typical of short-term loan repayments. And, while loan interest rates vary from lender to lender, they are typically 2% higher than most on the market and will be affected by the home’s loan to value ratio LTV and your personal financial history. Doing research on the current real estate market will help you evaluate how your home will fare on it, though it should always be done anyway before making any fast decisions. It’s not unheard of for loan extensions to be offered, should your current home be struggling to be sold on the market.
A lender for Arizona Bridge Loans can be found at your local bank or credit union. Alternative routes also include seeking out information for a 401 k or a home equity loan. Home equity loans are common solutions, despite the requirement of needing a high credit score and steady income. These loans work by taking a second mortgage on your home that is then used towards new loan funding. If you are seeking something with low interest rates, personal loans are a great option that can be combined with other types of loans if needed. Before making any fast decisions, it is important to thoroughly analyze all of your options and determine what short- and long-term goals you have that would be benefited by each type of loan option. If “bridging the gap” is not the right option for you, there are plenty of alternatives that promise success in various situations so that you can have your dream house.
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis Dahlberg Broker/RI/CEO
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
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