Home Listings vs Home buyers
The Texas Real Estate market is as crazy as I have seen it in the near 20 years I have been helping families with the financing of their homes. In 2020 and 2021, home sales in popular cities in Texas like the DFW, and more specifically where I office, Flower Mound Texas, have run into a very unique situation. It is simple. There are a ton of home buyers making offers on homes, but there are very few sellers out there. Hey, supply and demand right? You know what that does to the price when the supply is low and the demand is high. It drives prices up. It also means you are certain how fast you can get your home sold, but uncertain how fast you will find and close on a new home. A bridge loan can be a costly way to transfer current equity into your next home.
Using Equity From Bridge Loan?
Every week a new prospective buyer is calling me asking about bridge loans, and how they can use the equity in their current house to buy the next house to meet downpayment requirements on new home purchase mortgages. A bridge loan is an option, and if you are flat set on that option, text me or call me at 469-450-2723 and I can refer you to a highly experienced bridge loan originator that I trust. If you are interested in another option, continue reading.
Bridge Loan Alternative
Combo lending is when you get more than one mortgage on your home. If you are required to put 5% down on the purchase of your next home, and you have at least that much saved or can borrower from a family member or temporarily from a 401k, then you can do an 80/15/5 combo…first lien is 80% of the purchase price, second lien is 15% of the purchase price, and you put 5% down. The plan would be that you buy your home just like this and once you have closed on your new home, you can list your current home for sale…in this market you could probably have it sold and closed in a couple months. When your current home sells, you can take that equity and payoff the 2nd lien, leaving you with one loan of 80%. Even better, I can tailor fit this combo structure in relation to how much net cash/equity you will get from the sell of your current home. You might be getting so much equity from the sell of your current home that it would cover 50% of the purchase price of the new home. I can tailor fit this structure such that the second lien is equal to how much equity you want to take from the sell of your current home to put into the next home.
Qualifying
Since you will not have sold your current home before you close on the new home, you will have to be able to qualify for both mortgages…calculating your DTI will come into play. Please call or text me to see if you can qualify for this structure, Or click the Contact Us link at the top of this page to reach me. We do not charge any fee for such.
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