Mariana Wagner

Colorado Springs Mortgage Insight: The How and Why of Bridge Loans

Forward: the Colorado Springs Mortgage Insight is a series of mortgage articles written by local mortgage experts exclusively for our readers, here on Colorado Springs Real Estate Connection.

Colorado Springs Mortgage Insight  The How and Why of Bridge Laons
By: Marcy Langlois – Mortgage Loan Consultant/ Vice President – Colorado Capital Bank

Bridge loans are loans that help home buyers in Colorado Springs use the equity that they currently have in one property to purchase another property.

Example: Mary currently owns a house that is worth $500,000, but only owes $250,000. She wants to buy a new home for $750,000, but only if she can put a substantial amount down on this new home. Mary knows that the Colorado Springs real estate market has shifted, so it may take a little longer for her current home to sell, but does not want to miss the opportunity to purchase this new home.

This is where the bridge loan can help.

A bridge loan is a short term loan on the equity that a homeowner would like to use from their existing home towards the purchase of their new home.

Mary could get a line of credit against her existing home for $160k and use this as the 20% downpayment on the purchase of the new home. The remaining $10,000 could be used to offset the two mortgage payments that she would be juggling for the few months it may take to sell her current home.

This bridge loan has now afforded Mary the opportunity to buy the new house without HAVING to sell the old house beforehand, as well as allowing her to get the best rate available because she put down 20% of the purchase price.

This scenario can be worked for many people in many different situations, but a lot of care must be taken regarding the sale of the original home.

If you are considering obtaining a bridge loan to “bridge the gap” between selling your current Colorado Springs home and buying your future home, make sure you talk with a competent lender who understands all the ins and outs of these particular types of loans. It is also very important that you hire a Colorado Springs Realtor® that can effectively market and sell your current Colorado Springs home.

For More information on how and why a Bridge Loan may benefit you in your current situation, please contact: Marcy Langlois – Vice President Colorado Capital Bank – 719.482.7070

November 7th, 2007 by Mariana Wagner | Leave A Comment

This entry was posted on Wednesday, November 7th, 2007 at 9:47 am and is filed under BUYERS, Colorado Springs Homes, Colorado Springs Real Estate, Mortgage and Finance, SELLERS. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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