The housing market has reached an uneasy equilibrium.
Sales volumes are down compared to normal years but the number of homes for sale is down, too. So for homebuyers, it might as well be a booming market—many buyers still are facing competitive situations and multiple bids. According to the National Association of Realtors, there was just a 2.6-month supply of homes for sale as of March 2023—a level that fits any definition of a seller’s market. That means a sense of urgency among home buyers–and an ideal scenario for bridge financing. This product is a useful addition to your lineup of loan offerings because it allows your homebuyer client to shop as if they were a cash buyer. Instead of waiting for the sale of their current home to close so they can extract the proceeds from that sale, the buyer can use a bridge loan to move quickly.
LendSure’s bridge loans let home sellers tap their equity so they can become buyers today—not when their home sells months from now. A bridge loan puts your client in a more competitive position compared to other bidders who must wait to sell their current homes first. A bridge loan lets your client make a winning offer. Another advantage is that the client is not required to make any monthly payments.
How is a Bridge Loan used?
A bridge loan is a short-term loan that can be paired with the purchase mortgage on the buyer’s next property. The bridge financing pays off the existing mortgage while also providing cash out for the purchase of the new property.
Example:
Current/Departure Property
Current Market Value $1,000,000
Loan to Value 75%
Bridge Loan Amount $750,000
Outstanding Mortgage Paid Off $150,000
Cash Out for Down Payment $600,000
New Purchase Property
Purchase Price $1,500,000
Cash from Bridge Loan $600,000
Cash from Liquid Assets $200,000
Loan Amount $700,000
Bridge Loan on Existing Property
The existing property is listed for sale, and when the sale closes, the bridge loan balance is paid off. The bridge loan has a six-month term, with no monthly payments, and no prepayment penalties. Because there are no payments, no Debt-To-Income ratio (DTI) is calculated on the existing property loan.
Purchase Mortgage for New Property
The borrower can make an offer on their new home by using the cash-out proceeds from the bridge loan as a down payment. A wide variety of loan programs are also available to choose from. For example, income from self-employed borrowers can be calculated using bank statements.
Why should I consider a bridge loan for my borrowers?
A bridge loan can be a tailor-made solution for a borrower seeking to purchase properties between $150,000 and $1.5 million—but whose cash is tied up in another property. When you partner with us, LendSure will guide you through the details of each step in the process. Bridge loans empower your borrowers to move fast on a desired property without having to first sell off another asset. It’s an effective way to stand out and be successful in what’s still a highly competitive purchase market.
How does it work?
At LendSure, prequalification for bridge loans can take as little as 24 hours, and full conditional approval is usually complete within 48-72 hours. LendSure offers quick funding times and a customer-friendly approach to debt-to-income calculation. By providing fast solutions to clients, your business will enjoy a high potential for growth. The borrower makes a one-time repayment due at the end of the loan term or when the property sells, with interest accruing during the life of the loan. Other restrictions and limitations may apply. Granting of a loan is subject to the credit and policy requirements of LendSure Mortgage Corp.
Benefits of a Bridge Loan:
● No monthly payments. A single payment is due when your client’s current home is sold.
● Up to 6 Months to sell departure residence. Your client has up to a year to sell their current home, so they can get the best-selling price possible.
● Make a non-contingent offer on your client’s new property. Win in a hot purchase market by making a non-contingent offer! Opting for a bridge loan could enhance the competitiveness of your client’s application.
● Your clients can access the equity from their current home to purchase their next one. The bridge loan will pay off their existing mortgage AND provide cash out to purchase the new home.
Why should I become a bridge loan expert?
Our bridge loans can help you build a stronger business relationship with your realtor associates, which leads to more referrals. By offering bridge loans and other Non-QM solutions to your borrowers, you’ll stand out as an expert. Our customized solutions help them accomplish their unique financial goals.
In today’s competitive real estate landscape, buyers need to be empowered with swift, successful transactions. Bridge loans can be the perfect solution for property owners who need liquidity to buy a property. It’s that simple.
Why LendSure Mortgage Corp.?
Headquartered in San Diego, California, LendSure Mortgage Corp. was founded in 2015 to help mortgage professionals better serve their clientele by offering a wider range of programs to meet their needs. LendSure Mortgage Corp. offers a comprehensive range of non-QM loan programs for borrowers that don’t fit conforming guidelines.
When you partner with LendSure Mortgage Corp., you get access to outstanding loan products, superior customer support, and outstanding guidance throughout the process, thus empowering you with a competitive edge. By expanding your lineup of options to include non-QM loan solutions as well, you’ll prove to be an innovative resource with a full arsenal of tools available to meet almost any need.
Are you ready to benefit from a commonsense approach to lending? Contact us today to learn more about non-QM loans and how partnering with LendSure Mortgage Corp. can help grow your bottom line.
