Move-up buyers? The bridge loan is back
The bridge loan is back. While the details of a bridge loan vary by lender, they allow a homeowner to buy a new home before selling their current home.
Under a new version announced by Third Federal, for example, an owner's existing home payment is eliminated during the process.
"The new mortgage product, a bridge loan, is designed to be a link, or bridge, between selling a borrower's current home and purchasing their next home," Third Federal said in a statement announcing the new bridge loan. "Under the terms of the Third Federal Bridge Loan, a borrower's existing home payment is eliminated so they only have one payment while they sell their current home."
"With many markets facing low housing inventory, borrowers who are interested in buying a home need to act fast to have their bid accepted," says Marc A. Stefanski, Third Federal's chairman and CEO. "By using our bridge loan, borrowers who already own a home can eliminate a barrier to buying their next home and better compete in low inventory markets."
The product is available in states where Third Federal offers mortgage purchase loans, including: Ohio, Florida, North Carolina, Pennsylvania, Maryland, New Jersey and Virginia. Effective today, Third Federal is also offering purchase loans and the new bridge loan in Kentucky, Illinois, Indiana, Georgia, Missouri, and Tennessee.
Details on Third Federal Bridge loans
Borrowers can use the equity in their current home for the downpayment on their new home
No principal or interest payments on the bridge loan are required for up to 12 months while the current home is being sold
There are no application fees, cancellation fees or prepayment penalties
The bridge loan is available for single-family homes, planned unit developments and condominiums that are primary residences.
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