Don’t Waste Time Waiting for Your Home to Sell!
Move Now with a Retiree/Fixed Income Bridge Loan.
Retired or Fixed-Income Bridge Loan Program
Don’t Let A Fixed Income Limit Your Retirement Plans
If you’ve settled into retirement and life on a fixed income and have found you cannot qualify for conventional mortgage loans, a Retired Mortgage Bridge Loan can help you move closer to family and quality medical care – NOW, not after your house sells. Hurst Lending created this bridge loan option to ensure you get “credit” for the home equity you’ve spent your life building and to make moving closer to loved ones possible, regardless of a fixed income. This option creates a new 1st lien bridge loan on a new home in the right location that is paid off when your old home sells.
For example, if you own a $500,000 home that is completely paid off, but too far away from medical care or family, and have found the perfect $250,000 house or condo near relatives, but cannot qualify for a conventional loan based on your social security income, a short-term bridge loan allows you to use the equity in your current home before it sells to secure the right home in the right location. Then, as soon as your old home sells, the bridge loan is paid off!
If you are interested in getting more information about our Retired Mortgage Bridge Loan program please click the button below to contact us today.
Frequently Asked Questions About Bridge Loans
Why Is The Interest Rate Higher on A Bridge Loan?
Bridge loans are short term loans, lasting up to 12 months. The loans are issued on the assumption that Buyers will be able to quickly sell their existing properties – or qualify to refinance the bridge loan in the near future for Self-Employed and 1099 borrowers – and need less than the term of their loan to bridge their transition and pay off the loan. For this reason, bridge loans are riskier from a lender’s perspective and consequently come with higher rates than a conventional loan.
Why Doesn’t Everyone Get One?
While more flexible and convenient than their traditional counterparts, bridge loans aren’t for everyone or for all situations.
Bridge loans do require fees, slightly higher interest rates, and a term limit. Also, to qualify for a bridge loan, buyers must show that they have the financial health to make payments on both their old home and their new home.
Who Can Qualify?
In most cases, lenders only offer loans for 80% of the combined value of the two properties, meaning borrowers must have significant home equity in the original property or cash on hand to invest as equity in the transaction. Buyers will be qualified by the lender to own two homes and must be able to pay what is essentially two mortgages rolled together. Due to the additional financial strength required to float two mortgages, most lenders require a solid debt-to-income ratio and a moderate to high credit score.
Can I Use a HELOC Instead of a Bridge Loan?
A Home Equity Line of Credit (HELOC) is sometimes considered an alternative to a Bridge Loan. HELOC loans use equity built up in property as collateral for a loan to withdraw a large lump sum of cash. Once withdrawn, the money can be used for any reason, including the purchase of a second property.
HELOCS can be a great option if a borrower has not yet put their old house on the market. A buyer can create a second loan for a percentage of the equity built up in their existing home to use in the purchase of a new home. The loan can be repaid upon the sale of the existing home, much like a Bridge Loan. Unfortunately, few, if any, lenders will offer a HELOC to a borrower who has their house listed for sale. HELOCs are generally intended as a longer-term loan and lenders do not want to spend the time and effort to put into place a HELOC loan only to have the borrower pay off the loan as soon as their house sells.
If you are wondering whether a bridge loan or a HELOC is the best option for your situation, one of our mortgage experts would be happy to help you decide how to move forward toward purchasing the home of your dreams.