What Is A Bridge Loan And How Does It Work?

 Understanding Bridge Loans: A Simple Guide

Navigating the real estate market can be challenging, especially when you're trying to buy a new home before selling your current one. Enter the bridge loan—a handy financial tool designed to "bridge" the gap between these transactions.

What Exactly Is a Bridge Loan?

A bridge loan is a short-term loan that lets you tap into your home's equity to fund the down payment for a new property. This means you can secure your dream home without waiting for your existing one to sell. It's particularly useful in competitive markets where sellers are less inclined to accept offers contingent on the sale of another property.

How Does It Work?

Here's a straightforward breakdown:

1. Loan Types:

   • First-Mortgage Bridge Loan: This loan pays off your current mortgage and provides additional funds for the new home's down payment. Essentially, it replaces your existing mortgage.
   • Second-Mortgage Bridge Loan: This loan adds to your existing mortgage, giving you the necessary funds for the down payment without altering your original loan.

2. Borrowing Limits: Typically, you can borrow up to 75% of your home's value. So, if your home is valued at $400,000, you might access up to $300,000.

3. Repayment Terms: Bridge loans are short-term solutions, usually requiring repayment within 12 months or less.

Pros and Cons

Pros:

• Quick Access to Funds: Enables you to act swiftly in purchasing a new home.
• Non-Contingent Offers: Strengthens your buying position by removing sale contingencies.

Cons:

• Higher Costs: Expect interest rates between 6.99% to 8%, plus closing costs ranging from 1.5% to 3% of the loan amount.
• Multiple Payments: You might be juggling up to three mortgage payments temporarily.

Is a Bridge Loan Right for You?

Before diving in, assess your financial situation:

• Home Equity: Ensure you have significant equity, as borrowing limits are based on your home's value.
• Debt-to-Income Ratio: Confirm you can comfortably manage multiple payments, even if your income fluctuates.

In essence, while bridge loans offer a convenient pathway to your next home, it's crucial to weigh the benefits against the costs and ensure it aligns with your financial health.

For more information, contact us!

Aundrea Beach-Greco
CMG Home Loans                                                                                                 
Mortgage Advisor, CMPS                                                                              
NMLS 333739
(702) 326-7866                                                                                         info@aundreabeach.com                                                                            
www.iLendLasVegas.com

First lien HELOC to Buy or Refinance a Home | CMG's All-In-One Loan

 

The All In One Loan

Mortgage interest can be one of life’s biggest financial obstructions. The All-In-One Loan was developed by combining banking functionality with home financing into one dynamic instrument, borrowers are able to save tens of thousands of dollars and years off their loan.

WHAT IS THE ALL IN ONE LOAN?

Designed after popular programs around the world, the All-In-One Loan is the nation’s first transactional offset type-mortgage program.

Home financing and banking combined:

• Deposits lower your loan’s principal
• Funds remain available for expenses
• Interest is calculated on the average daily balance
• This lowers the monthly interest payments
• Tens of thousands of dollars can be saved over the life of the loan
• Mortgage freedom can be achieved in half the time or less

At CMG Financial, we are proud to offer our clients the All-In-One Loan. Unlike a traditional mortgage, the All-In-One is a first-position home equity line of credit. Lines of credit are unique because of their flexibility, allowing you to apply as much money as you desire toward the balance without losing access to your funds. Like a traditional line of credit, you only pay interest on the outstanding balance. The All-In-One Loan provides 30-year access to home equity dollars, has a great low rate, and no hidden fees or required balloon payment.

Additionally, the All-In-One Loan works just like an ordinary checking account. Yes, home finance and personal banking are bundled together! This revolutionary design allows you to use your everyday cash flow to offset your loan’s balance and save mortgage interest without requiring a change to your budget.

Deposits made into the All-In-One Loan pay down principal first and remain available 24/7 through the banking features. The loan comes with ATM cards for all users of the account, secured online bill-pay, unlimited check writing, direct deposit and bank-to-bank wire transferring. Your monthly interest payments are computed on each day’s ending balance, so even as you withdrawal money from your account for regular expenses, your loan’s daily balance is kept lower for longer - and that equates to less interest being charged than with a conventional mortgage.

In effect, you avoid having to pay more interest on your loan using your regular cash flow than what you could typically earn on those dollars in a regular checking account. Less of your money spent on monthly mortgage interest means more of your money left over to help you meet other financial objectives.

Call today to learn more about the All-In-One Loan and take a tour using our All-In-One simulator.

Aundrea Beach-Greco 

Mortgage Lender, CMPS 

NMLS 333739

📱 +1 702-326-7866

📧 info@aundreabeach.com

🌐 www.AundreaBeach.com

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Aundrea Beach-Greco, CMPS. Licensed Mortgage Loan Officer. NMLS 333739

702-326-7866 info@AundreaBeach.com

Find me online www. AundreaBeach.com

Apply online at www.iLendLasVegas.com