If you’re researching bridge loans in Raleigh, NC, you could be looking for a more predictable sale. Around 41.9% of listings in the Raleigh-Cary metro are new construction, so you might be buying a home that’s ready before your current one is sold. Maybe you’ve found the right location near work or are upsizing to better fit your family’s needs. If your equity is tied up in your current home, you might be feeling stuck when you want to secure a home that’s right for you. A bridge loan can be a great solution, but it isn’t the only one available. If you want to strengthen your offer and avoid juggling two different transactions, there are other ways to do so. We’ll guide you through how bridge loans in Raleigh work, what yours might look like, and how modern Buy Before You Sell programs can help you make your next move with more flexibility. A bridge loan is a short-term loan used to “bridge” the timing gap between buying a new house and selling your current one. You may also see it called bridge financing, interim financing, gap financing, swing loans, or bridging loans. They all serve the same purpose: to give you a clean way to move by letting you access your home equity to use as a down payment on your next one. One problem it can solve is protecting you from losing out because of a home sale contingency, since you’re able to buy before your current house sells. Then, you use the proceeds from the sale of your old home to pay off the bridge loan. However, keep in mind that bridge loans are specialized products, so the interest rates are typically higher than traditional mortgages. Raleigh buyers have plenty of directions to take their home search, like staying within the city or looking elsewhere in Wake County. If you’ve found a home that’s right for your commute or growing family, you may find that the cost of a bridge loan is worth it if you don’t want your current sale to control when you can buy. A common scenario is finding the right home in Cary, Apex, or another Triangle community before your current property has sold. Bridge financing can let you access your existing equity for the down payment and closing costs on the new purchase. Oftentimes, the lender handling your new mortgage will also offer a bridge loan. They usually require that your current home be actively listed for sale and will typically extend the bridge loan for six months to one year. In general, these are the requirements to qualify for a bridge loan in Raleigh: Your lender may also need to calculate your debt-to-income (DTI) ratio, which could include your old mortgage payment, your new mortgage payment, and any interest-only payments on the bridge loan. If your current home is already under contract and the buyer has final loan approval, your lender might only count your new mortgage payment. If the sale ends up being delayed, this would ensure you don’t have to carry two payments. There isn’t one specific way to structure a bridge loan, but the example calculator below can help you visualize what a bridge financing solution might look like. Adjust the values to see an estimated monthly interest payment, available proceeds, and the balloon payment due when the loan is repaid. For a long time, bridge loans were pretty much your only option if you wanted to tap into your home’s equity before you sold, but you’ll find a lot more to choose from today. In addition to traditional bridge financing, some companies now offer modern Buy Before You Sell programs designed to tackle the challenges of buying and selling at the same time. These programs can help homeowners: These newer programs may be especially useful if you’re trying to line up the purchase of a newly built home or move closer to Research Triangle Park without waiting for your current home to sell.What is a bridge loan, in simple words?
How do bridge loans work in Raleigh?
What does a bridge loan look like?
Is a bridge loan the best way to buy before you sell in Raleigh?
