When homeowners are in the middle of trying to sell their home, their immediate concern is typically trying to determine how much money they can make. A potential seller is not usually interested in determining how much money they can borrow from a loan. But bridge loans in Massachusetts are often a vital part of the home selling process.
What Is a Bridge Loan?
Bridge loans in Massachusetts are temporary loans that allow homeowners to borrow the amount needed for a down payment on a new home. These loans are taken out before the home they already own has been sold. They are meant to allow home owners to have the money to purchase a new home without having to wait on the sale of their old one.
Other names for bridge loans include:
- Gap financing
- Interim financing
- Swing loans
What Are The Benefits of a Bridge Loan?
The primary benefit of using a bridge loan is the ability to move into a new residence right away. Another benefit is the ability to go several months without having to make any type of mortgage payment.
How Bridge Loans Differ from Traditional Loans
One reason why people choose bridge loans instead of traditional loans is the ease of obtaining an approval.The entire application process for a bridge loan takes less time than a traditional loan.However, traditional loans usually have lower fees and lower interest rates. Homeowners must decide if the speed of the loan process is more important than the potentially higher fees.
Harper Financial provides alternative mortgages in Massachusetts.