Florida Bridge Loan

11 month financing to buy a new primary home while selling your old home.
Fast closings.
No prepayment penalty.
A bridge loan has different underwriting standards than a conventional loan. A person that doesn't qualify for a conventional loan might qualify for a bridge loan.

Why a Bridge Loan?

You need to buy a new home, but you can't qualify for a traditional mortgage until your old home sells. You can't sell your old home until you have a new home to move to. You're stuck. This is where a bridge loan comes in. It allows the purchase of a new primary residence while selling your old home.

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How it works...

You are required to have equity in the property being sold or a down payment will be required. A mortgage is placed against the old home and new home. After selling expenses are factored in, the maximum loan to value is 75%.

The quicker you get your old home sold, the less interest you will pay. The bridge loan does not have a prepayment penalty. You can pay it off anytime without penalty. You have the option of paying the interest monthly or deferring the interest payment for 11 months. The loan is a balloon loan that is due in 11 months along with the accrued interest. A balloon loan is a type of loan where the full loan amount is due on the maturity date.

A lot of people can't afford two mortgages at the same time. The bridge loan allows them to defer payments for up to 11 months, giving them time to sell their home. When the home sells, they pay off the bridge loan along with the accrued interest.

Frequently Asked Questions

Question: What is a bridge loan?

Definition: A bridge loan is short term financing for real estate. The Consumer Finance Protection Bureau (CFPB) allows "temporary or bridge loans with terms of 12 months or less (with possible renewal)". Unlike traditional mortgages that require the consumer to demonstrate their ability to repay, the CFPB waives this requirement for bridge loans. Lenders can still have their own requirements.

Question: How long does it take to get a bridge loan?

Answer: The typical time to get a bridge loan is 2 to 4 weeks.

Question: What is the Florida Emergency Bridge Loan?

Answer: The Florida Small Business Emergency Bridge Loan program provides short-term, zero-interest working capital loans by the State of Florida that are intended to “bridge the gap” between the time a disaster impacts a business and when a business has secured longer term recovery funding such as federally or commercially available loans, insurance claims or other resources. more

Question: Am I paying interest on interest?

Answer: No. You only pay interest on the original loan amount. You pay the same amount of interest whether you pay the interest monthly or defer the interest payment until you pay off the loan.

Question: Which is better? Paying the interest monthly or paying it when I pay off the loan?

Answer: It is up to you. It is the same cost either way. A lot of people find it easier to pay the interest when they pay off the loan.

Question: When I sell my home, what if I don't pay off the bridge loan completely?

Answer: If you qualify, you can refinance the remaining balance into a conventional 30 year fixed mortgage. We offer this type of financing as well and can prequalify you to see if you qualify. The conventional loan program is through our wholesale lenders with low rates.

Question: I want to put an offer in on a home, what will I need?

Answer: You will need a prequalification letter for the bridge loan program. After talking with us, if you qualify, we will email you a prequalification letter. You can forward this letter to your realtor to submit the offer. We offer FREE Prequalification.

Question: Where can you do mortgage loans?

Answer: We are licensed to do mortgage loans anywhere in Florida. We cannot do loans in other states. Our office is located in Cape Coral, FL on a canal. The City of Cape Coral has over 400 miles of canals. The city has the most canals of any city in the United States. You can drive your boat or your car to our office.

Bridge Loan Calculator

To estimate the monthly payment on a bridge loan, do the following on your calculator:

Loan amount * 0.0067 = estimated monthly payment (interest only)

Benefits

Many buyers want a new home, but can’t qualify until they sell their old home. They don’t want to sell until they have a new home. With a bridge loan, they can purchase today and sell later.
Another problem with selling first and buying second is that buyers often get pressured into buying the wrong home simply because they need a place to go. With a bridge loan, buyers can take as much time as they need to find the right home.
Once the buyers get moved into their new home, the old home can be cleaned up and staged, leading to a fast sale with the highest sales price.