Many homeowners in our area may be sitting on quite a bit of home equity that they could use to purchase their next home. When it’s not a “buyer’s market”, you may have lower odds of a seller wanting to accept an offer if it’s based on needing to sell and close on an existing home. In order to have your offer accepted, it’s helpful to put forward an attractive offer that will make it easier for the seller to select your offer over others.

Here are some programs that can help!

Bridge loans. A bridge loan is a temporary loan that is placed on the departing residence. The homeowner is able to access a portion of the home equity to use towards the purchase of the next home. The bridge loan is paid off with any other liens once the former residence has sold and closed. A bridge loan allows you to make an offer without having your existing home being sold. Most lenders will require that the departing residence be listed with a licensed real estate agent within a specific amount of time.

Many bridge loans, including the one I had available with my former employer, are in the form of a second mortgage with interest that accrues (interest is paid when the loan is paid off). The homeowner, in this case, would still have a mortgage payment that needs to be paid on departing residence and eventually, with the new home. Typically, the homeowner/homebuyer needs to be able to qualify with the old mortgage payment, new mortgage payment and a bridge loan payment (even if a payment is not due).

We have a bridge loan that is basically the same as above except it pays off the existing mortgage on the departing residence and no payments are due for 12 months or until the home sells. It’s a first lien mortgage. The homeowner will only have to worry about their new mortgage payment and it’s easier to qualify for with one less mortgage payment to factor.

Home equity loan. You may be able to obtain a home equity loan or second mortgage on your departing residence to obtain funds to purchase your next home. Be sure to contact your mortgage professional who will be helping you with your purchase to make sure that it doesn’t impact your qualifying ratios.

Cash Buyer Program. We have a cash buyer program that allows you to present an offer on a home effectively as a cash buyer. (This is available even if you do not have a home that you need to sell!) If you are in a very competitive situation or market, making a cash offer is often viewed as more desirable to a seller than making on that’s subject to financing. With the cash buyer program, the home is purchased on your behalf, and you purchase the home back using your financing with our company (conventional and VA loans only). Your real estate agent, who is representing you a buyer, will need to take a 60-minute class to learn more on what’s required to present an offer using this program.

Last but not least, if you are looking at selling and buying at the same time, I hope that the mortgage professional who’s helping with the financing on your purchase is also supporting the sale of your listing. I have marketing available, including financing flyers and individual property listing sites (Digital Listing) that include financing options as well as other tools to help support your efforts for a fast sale. I actively market my client’s listings to help add exposure and expedite their process in concert with your real estate agent.

If you are thinking about selling or buying a home, I’m happy to talk with you to review your scenarios and answer any questions and start planning!