The way this is done is to take a Bridge Loan out on your present home. It is a temporary loan secured by the equity in the home you own now. After your new home is completed, you can sell your old home and pay back the Bridge Loan at that time.
This is a sample of a program for a bridge loan: You supply us with either a Executed Sales Contract for the sale of your home, or a Listing Agreement for the sale of your present home. With the Sales contract, you can borrow up to 90% of the value of your home. With the Listing Agreement, you can borrow 80% of the value of your home. Of course, what you owe already is deducted from the new loan amount. You get the difference, less the costs of the loan and less 6 months payments (PITI) for your existing loan so those payments are made for sure. But, the money does not go to you. It is all applied to the downpayment on your new home. This loan does not require payments for the 6 months that it runs. At the end of the 6 months, or before, you have to pay it all off. The interest rate is prime plus 1%. It is a fixed rate loan. The maximum loan is $500,000 (this requires an exception), standard loan maximum is $333,700, and the minimum loan is $15,000.
This way you don't have to use your cash to get the construction loan done or you won't lose the home you want to buy because you don't have the funds to close. Use these 100% Construction/Bridge Loans to have the cash you need to make building or purchasing possible. Please call me with the particular figures pertaining to your old and new homes, and I will do the numbers for you to see how it works.
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Contact Judy Sellens at www.SellensLending.com
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