Type of loan to Bridge buying and selling home
Listen to you all the time. Currently own home with no mortgage. Building a new home of equal value. I would like to borrow about 70% of home price to bridge 2-3 months between closing on new home and selling old one. What type of loan do you recommend I pursue?
Terry Says
This is the WORST situation to be in — sort of like standing with one foot on the dock and one on the boat, as it slowly drifts away.
Contact your mortgage broker immediately. Or contact my mortgage expert Leslie Struthers at Guaranteed Rate (Leslie@rate.com) to see how to handle this situation. (No need to mention my name, she’s great to everyone!)
Also, contact your bank. Many construction loans have an automatic “take out” — a promise of a 30 year fixed rate mortgage, that will be at a slightly higher rate than what’s prevailing when you switch from construction and get your certificate of occupancy.
You don’t want to pay for TWO loans — one on your current home, and another on your new home. But I’m surprised the construction contractor hasn’t demanded proof of interim financing given your situation. Hurry, while rates are low.
