Your friend, the bridge loan

The stress is very real when buying your first house; the process is new and unfamiliar. But this can also be the case when buying your next house. Whether you’re scaling up or downsizing, not only do you have to worry about getting financed, beating the competition, and making your way to closing on your new home, but there’s still the question of how to sell your current property. Do you just suck it up and make another big down payment? Do you make a contingent offer, which comes with risks of its own? Or…do you use your current house to buy the second house?

Enter the bridge loan. In most cases, your property has appreciated in value since you first bought it. If you live in Western Washington, this is absolutely the case. I know some people who live in certain Tacoma neighborhoods where their house has literally doubled in value in just several years.

So what to do with all this equity? Why, use it for a down payment on your desired property, of course! By partnering with a reputable local lender, you can take some of your equity out for this very purpose. The bridge loan has no payments due on it until you close on your new home. The benefits of this include:

• Not requiring you to make a contingent offer, which many sellers shy away from.
• Not having to dig into your savings, retirement fund, or beg relatives for a down payment.
• Peace of mind! Get your loan, find your dream house, move into it, then sell your vacant old house. No need to juggle both at once.

A bridge loan’s allowable amount is based off of up to 75% of the total value of your house, minus any debts currently on it. This is determined by a comparative market analysis performed by a real estate broker, which I am happy to do on your behalf. Feel free to reach out if you have any questions about this great program, or are simply curious about your home’s current market value.

Anders Ibsen

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