Promoting your Atlanta dwelling whereas seeking to buy a brand new one could be difficult. Lining up the sale of your present dwelling whereas making an attempt to shut the deal on a brand new one, significantly in a aggressive market the place stock is low, might really feel unattainable.
You may assume your solely alternative is to promote your present dwelling, transfer into momentary housing, and hope your future dwelling turns into out there directly.
Nonetheless, there’s one monetary device you most likely haven’t thought-about – a bridge mortgage. A bridge mortgage is a short-term financing answer, supplying you with the mandatory revenue to buy a brand new dwelling, even earlier than you’ve bought your present one.
DISCLAIMER: As a pleasant reminder, this submit is meant for instructional functions, not monetary recommendation. Should you want help navigating using a bridge mortgage in Atlanta, HomeLight encourages you to achieve out to your personal advisor.
What’s a bridge mortgage, in easy phrases?
A bridge mortgage is a sensible, short-term financing answer designed to “bridge the gap” for owners such as you. Any such mortgage leverages the fairness in your current dwelling, offering you with the mandatory funds for a down cost and to cowl the closing prices of your new property.
Whereas bridge loans typically carry increased prices than conventional mortgages, they provide a fast path to buy your new dwelling with out the wait and uncertainty of promoting your outdated dwelling first.
How does a bridge mortgage work in Atlanta?
Think about you’ve discovered your dream dwelling in Atlanta however haven’t bought your present home but. That is the place a bridge mortgage comes into play. It makes use of the fairness out of your earlier dwelling to cowl the down cost and closing prices in your new dwelling, performing as a monetary bridge between the 2 transactions.
The identical lender dealing with your new mortgage will often handle your bridge mortgage. They’ll anticipate your current dwelling to be available on the market, providing the bridge mortgage for a interval starting from six months to a yr.
An vital facet of this association is your debt-to-income ratio (DTI). This calculation will embody the mortgage in your outdated home, the mortgage in your new Atlanta dwelling, and any interest-only funds on the bridge mortgage. In case your outdated house is already beneath contract with a purchaser who has secured mortgage approval, your lender may take into account solely the brand new mortgage cost within the DTI calculation.
Lenders use this strategy to make sure that you could comfortably handle funds on each properties in case the sale of your outdated dwelling takes longer than anticipated.
What are the advantages of a bridge mortgage in Atlanta?
Bridge loans supply a number of benefits, making them a sensible alternative for Atlanta homebuyers in transition:
