Gay realtor San Diego has a lot of advice for those homeowners who find themselves in the position of needing to close the deal on a new home before the old one is sold. This can not only sabotage the entire deal but it can also sabotage sealing the deal on the new home.
The good news is that there are solutions to this kind of financial dilemma. Gay realtor San Diego advises finding some way to beg, borrow or steal the money until your previous home sells. If possible borrow from family and friends to avoid paying high interest on any short term or bridge loan.
As borrowing money from people you know is not always a good idea during a recession, you might try taking out a short term loan from a bank or a home equity loan based on the value of your current property. This is called a bridge loan or a swing loan. This loan will cover you financially from the time it takes to close on your new house and close the sale on your old house. This is a solution but there is a problem with it. The fees to obtain it are often very high and interest rates can also be sky-high as well.
If you are opting to obtain a home equity loan then make sure that you find one that has “low or no points.” One point in a loan equals a percentage point of the total money leant and this amounts to being the fee that you must pay (one point on $100,000.00 is $1,000.00, etc.) Almost without exception you are going to end up paying extra penalties for prepayment or for taking out a short-term loan.
You can also get a loan as a one shot deal from a bank but usually banks discourage it. Your real estate agent might be able to recommend you to a private lender who offers short term loans. No matter what, there is likely to be a bit of a financial sacrifice when you find yourself in the position of holding an unsold home and wanting badly to close the deal on a new one to prevent losing it. Having this money in place can mean the difference between being very comfortable in your new place and possibly never finding anything that is it’s equal. This is why many financial gurus advise having almost twice the money that you need to buy a house so that you are not caught in a bind should your dream house be available before you are!
Remember that a temporary home equity loan should not be a loan that is outrageously above your budget. It is not meant to help you buy a house that is way more expensive than you can afford. It is called a bridge loan because it is meant to assist you with getting from one place to another and not as a loan to help you get a home that is way too expensive.
Gay realtor San Diego reminds you that it is imperative to keep your debt low and not go for a dream home that you cannot afford. This is because these short-term loans can have an interest rate that is up to seven percent higher than other loans.