Unlock equity before sale

Trying to buy a new home in Orlando while selling your current home can feel like a logistical nightmare. You need equity you get from your existing property to fund your next purchase, but putting it into practice without ruining your daily life is not easy.

As homes take longer to sell and keep your sales time consistent, the time for next purchase becomes more challenging. Your only option is to sell, move in temporary rents and do a house hunt under pressure.

A bridge loan may be the tool you need to help everything get stuck, which gives you the flexibility to buy your next home without rushing to sell your current home first. In this guide, we will break down everything you need to get a bridge loan in Orlando.

What is a simple bridge loan?

Bridge Loan is a short-term loan that helps you buy a new home before your current home is sold. Homeowners often use homeowners who need to acquire equity to pay down payments or pay for the closure of a new place without having to wait to sell their old home.

This type of financing is often more expensive than traditional mortgages, but can provide valuable flexibility when time is tight.

Bridge loans are sometimes called:

• Bridge financing
• Bridge Loan
• Temporary financing
• Gap financing
• Swing loan

How does bridge loans work in Orlando?

When you find your next home, it may be common for you to use a bridge loan in Orlando, but the current loan is not yet available for sale. Instead of missing out on new purchases you can take advantage of equity in your existing home to pay for your next property’s down payment and closure fees.

In many cases, the same lender who provides a new mortgage can provide a bridge loan as a financing option. They usually require that your current home is listed and usually limit the term of a bridge loan to six months or one year.

Your debt-to-income ratio (DTI) also plays a role. Lenders may want to consider interest payments on your existing mortgage, new mortgage and bridge loan.

However, if your current home is contracted and the buyer’s loan is finalized, your lender may only calculate the new mortgage in your DTI calculation. This helps lenders assess whether you can manage two payments if your home is not sold immediately.

What are the benefits of bridge loans in Orlando?

Here are a few ways bridge loans in Orlando can make your move smoother:

• You can propose a non-levy offer: Sellers usually prefer buyers who have no unexpected home sale incidents.
• You only need to move once: Save yourself the hassle and extra money associated with temporary housing or storage.
• Old homes you can prepare for sale: Move out first and focus on preparing your home for stage and repair.
• Some lenders do not need to pay during the loan period: You may not owe anything until your previous home is sold.
• You can move quickly in your new home: Make an offer without worrying about selling it first.

What are the disadvantages of bridge loans?

While bridge loans can give you the flexibility and relieve the pressure of selling your current home and buying a new one, there are some downsides:

• Additional loan fees (underwriting fees, initiation fees, etc.)
• Increased financial pressure to pay for two mortgages and one bridge loan
• Qualifying may be more difficult than traditional mortgage loans
• Underwriting may be slower than expected

When is a bridge a good solution?

Bridge loans are not a blanket solution for all real estate transactions, but for some sellers it can relieve the pressure of transitioning between old and new homes.

Some examples of when a bridge loan may be a suitable solution include:

• You need to make a down payment interest from a new home in your current home.
• You want to avoid double movement or temporary housing.
• You have found your next home and need to take quick action to ensure it.
• Your offer of home sales contingency prevents you from competing with other buyers.
• You still can’t prepare or sell your home on the stage while you’re still living and want to move out first.