Bridge Loan? Buy New Construction + Sell Existing Home after move in?

Question

I've got a situation where I would like to buy a new construction home to be my primary residence. I am currently living in a home that I will need to sell. However, to get into the new home, I need to be able to make an offer without contingencies. So I am thinking a bridge loan might be what I need. My home should sell for more than the cost to buy the new home. We will be listing our existing home in the next week or so. But there's no way it will sell before I need to make my non-contingent offer for this new home.

Does anyone offer a load like this?

Current Home Value: $1,100,000 (I owe about $438,000)

Cost for new home: $950,000

As far as other assets:

Rental 1: Value $330,000 (owe $177,000)

Rental 2: Value $196,000 (own free and clear)

I have some stocks I could liquidate, but would rather not.

Does anyone offer a load like this?

Current Home Value: $1,100,000 (I owe about $438,000)

Cost for new home: $950,000

As far as other assets:

Rental 1: Value $330,000 (owe $177,000)

Rental 2: Value $196,000 (own free and clear)

I have some stocks I could liquidate, but would rather not.

Jeb Durgin · Answer

Yes, a bridge loan sounds like a great fit for your situation. Given the equity in your current home and the fact that you're planning to list it soon, many lenders would be open to providing short-term financing that allows you to make a non-contingent offer on the new property. If you'd like, we can connect to talk about or short-term private loan depending on your timeline and preferences. Let me know how you’d like to move forward.

Best,

Amber Stout · Answer

Hey John, you have great equity and solid assets. A bridge loan could work which would let you buy before you sell without contingencies.

I am an investor/mortgage broker in FL and happy to look into options for you with a little more detail. If interested, send me a DM.

Ko Kashiwagi · Answer

Hi John,

What's the take out/exit plan once you get the bridge loan? You could get a bridge on the purchase or refi + purchase but you'll eventually need a long term debt after the bridge loan matures. If you are a business owner, you may be better off using non-conventional programs to qualify like bank statement, P&L or no-doc loans

Tyler Jenkins · Answer

@John Wallace Will you send me information on the house you will be selling? I have buyers looking in Destin.

Patrick Roberts · Answer

@John Wallace Nice. We used to go Destin a ton when I lived in Louisiana. If DTI is the issue, a bridge loan would probably fix that part. Most of them convert your current primary to an investment property and then allow for no payment with a 6-9 month term. This gets rid of the DTI issue because the existing mortgage gets paid off by the bridge loan.

Patrick Roberts · Answer

What specifically is holding you back in this situation? Is it DTI, needing the equity from the current home, or something else?

A bridge might work here. What you may run into is that a lot of bridge loans have size and LTV restrictions. For instance, a bridge with a max loan size of $500k and a max LTV of 75% will not provide much liquidity from the equity in your current home.

Chris Seveney · Answer

I do not see a bridge loan working in this situation as when we do them the bridge must cover the new acquisition cost as it crosses the old and new property (2nd on old 1st on new). As mentioned maybe get a loan for 800k ish which would give you $375k in cash - on where near enough to cover the $950k on the new home.

John Wallace · Answer

Yeah... DTI is a little too high to get a mortgage for the new home purchase.

In order to get into the new place I need to be able to make a non-contingent offer.

We're in Santa Rosa Beach. Super desirable area. Will not be a problem finding a buyer for our house.

Bridge Loan? Buy New Construction + Sell Existing Home after move in?

8 Replies