The 3 Big Benefits of Bridge Financing
Once you have decided to sell your home and the sign is up, what do you do if you find your dream home before you have any offers? Since most people in Edmonton don't have a large five-figure lump sum sitting around in their bank accounts, it's not likely you'd have enough to make a down payment and secure your new home before your current home is officially sold. In situations like this, bridge financing in Edmonton is extremely beneficial and can help you make a down payment on a new house.
The Bridge Between Your Current and New Home
Just like the name suggests, bridge financing closes the gap between the sale of your current Edmonton home and the dream home you happened to find before you could sell. The way it works is you are able to borrow against the equity you have in the home that is on the market, so can make your down payment on the new home. With how brisk the housing market can be, this gives you a way to secure the home you really want and not risk having it sold to someone else while you wait for your home to sell.
Bridge Financing Saves You Time
One of the ways a bridge loan saves you time is that you are able to use the equity from the sale of your home to use as a down payment on your new home so you can close your deal faster. That's not the only time-saving benefit though! Moving to a new home in one day is stressful and when you're on a tight time budget, it seems something always goes wrong and causes a delay in closing. Rather than having to rely on everything going smoothly on moving day, you can move over several days to make your life a lot easier!
Variety of Options for Repayment
When it comes time to settle the bridge financing, Edmonton homeowners have some great options. You can choose to repay the loan before you secure a mortgage on the new home, either in full, or negotiate a repayment plan. If you do opt for a repayment plan, as long as you make all of your payments on time, this will look favourable on your credit report and possibly help you if you require a loan in the future. Your other option is to repay the bridge financing through your mortgage. While it will raise the amount owing on your mortgage, it allows you to make one monthly payment that suits your budget.
At BMC Mortgage & Investments, we have been helping people in Edmonton just like you with bridge financing so they can purchase their dream homes while selling their current properties. Contact us today to learn how we can help you get into your dream home!
Learn More About USING YOUR HOME EQUITY TO QUALIFY FOR A LOAN