Many buyers will take out a bridge loan so they can buy another home until they sell their existing home. It could be a great temporary idea if you are looking to take care of both houses without putting yourself at risk of losing money.
Bridge loans are prevalent in the real estate market. We will give you a brief explanation of what bridge loans are. Then we will talk about how long it takes to get a bridge loan after you have finished reading this article, you should have a basic understanding in regards to bridge loans.
What is a Bridge loan?
Consider a bridge loan to be a temporary loan, which will help you secure your current residents. The job of a bridge loan is to create some space between the sale price of your new home and the new mortgage mainly when the buyers existing home hasn’t sold before closing. To keep it very simple, you are getting your down payment as a loan for your new home before you have sold your current residence. Bridge loans can be an excellent idea for most home buyers, but they do come with some positives and negatives.
Bridge loans can help you get a few months of free payments You can purchase your new home and put your current home on the market without any consequences. You can still buy a new home, and use the equity on your existing home.
More expensive than other types of loans You need to own two homes if you want to qualify. The more financial burden on you when paying for two mortgages, especially when paying bridge loan interest.
How to get a bridge loan?
It will depend on a lender to lender, at the end of the day it boils down to your debt-to-income ratio when getting a bridge loan. The funding is only approved if you have the right debt-to-income ratio. The lenders need to make sure that you can afford to pay two mortgages and the interest fee on the bridge loans. Getting approved will require the lenders to look your credit score, income and debt-to-income ratio.
How long does it take to get a bridge loan?
There are many ways to apply for a bridge loan, but in most cases, an online application will do the job for you. It is one of the most convenient ways for borrowers to apply for a bridging loan in the UK. You don’t have to worry about your personal information getting leaked, as the website’s promises you to protect your information under the data protection act. Once you have completed the form and finished reading all the terms and conditions for the loan, It should not take any more than three to five working days to get the approval.
Getting a bridge loan can be an excellent idea for some people; make sure that you thoroughly do your research before getting one. Also, getting approved for a bridge loan does not take that long. You can expect an answer within three to five working days.