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What do you need to get a bridge loan in Oklahoma?
To obtain a bridge loan in Oklahoma, you should be prepared to meet these criteria:
- Qualified income: The lender will need to confirm that you can manage payments for current and new mortgages as well as bridge loans.
- Enough fairness: It is usually necessary to have at least 20% of the home equity, and some lenders prefer up to 50%.
- Good credit history: Designed to meet most lenders with a credit score of 650, although the higher your score, the better the terms you may receive.
- Listed homes: Some lenders in Oklahoma may need to prove that your current home is on the market to ensure it is sold at the end of the bridge loan period.
How much does a bridge loan cost in Oklahoma?
The cost of bridge loans in Oklahoma may vary, but overall, the price is higher than conventional mortgages. Bridge loans are usually 1 to 3 percentage points higher than the current mortgage rates. This marking reflects the increased risk of lenders as they give you the flexibility to buy a new home before selling your current home.
Remember that if your existing home is not sold within the bridge’s term, you will be responsible for paying the mortgage and bridge loan payments. Make sure your finances can cope with this potential burden.
How to reduce the cost of bridge loans
Financing your new home with the same lender may lead to savings. In this case, since both loans undergo a simultaneous underwriting process, redundant fees such as underwriting premiums can be exempted.
Comparing quotes from multiple lenders can also help minimize costs. Remember that bridge loans are temporary, so consider a broader financial situation and the overall convenience each option offers.
Budget settlement fees
Additional fees associated with bridge loans are inevitable. Settlement fees are typically between 1.5% and 3% of the loan amount, including various fees:
These costs may add up, so when considering bridge loans in Oklahoma, put them in your overall budget.
Bridge loan cost example
Here is an example of a $100,000 bridge loan and possible expenses.
You find the home you want to buy but are still waiting for the current Oklahoma home to be sold. The asking price for a new home is $260,000. You can only raise $160,000, but you still have at least $100,000 worth of equity in your current property. You want to get this money to make up for the shortage before you sell your new home to another buyer.
| Net loan amount | $100,000 | $100,000 |
| Interests (various) | 10% (e.g. 6 months) | $5,000 |
| Origin fee | 1.5% | $1,500 |
| Underwriting fee | $1,000 | $1,000 |
| Evaluation fee | $500 | $500 |
| Close Fee* | 2% | $2,000 |
| Total repayment amount | $110,000 |
*These shutdown costs are usually between 1.5% and 3%
Who offers bridge loans in Oklahoma?
In Oklahoma, lenders offering bridge loans may be smaller due to specific underwriting requirements associated with these loans. If you are considering a bridge loan, exploring multiple loan options is a cautious step. Here are some common sources you might find bridge loans:
- Your mortgage lender: This is usually the first stop for many borrowers, as these lenders provide customer loyalty or simplified services to existing customers.
- Local Bank: They may offer more personalized services and have a better understanding of the local real estate market.
- Credit Union: They often provide members with competitive rates.
- Hard money lender: Oklahoma Hardway Loans are often more flexible in their lending standards, but may charge higher interest rates.
- Unqualified Mortgage Lender: The loans offered by these lenders do not meet the strict standards of regular mortgage loans, which can be useful if you are not suitable for traditional loan molds.
Some innovative real estate companies also offer comprehensive services, including bridge loans, simplifying the navigation process between buying and selling homes. We will explore how such companies can help you later in this guide.