Byron, Georgia...an oasis in Middle Georgia's fastest growth area!™
Bridge Loans
There are two ways that a bridge loan can be done.
Refinance your existing home and take the equity in your home to pay down on the new home you are going to purchase.
Apply for a second mortgage or an Equity Line.
In doing a second mortgage and equity lines, most banks will allow you to borrow up to 85% of the appraised value on your existing home.
ExampleAppraised Value (existing home)$100,000.00
85% of the Appraised value 85,000.00
Minus what is owed on existing home-60,000.00
Funds you have to use to pay down on 25,000.00
New home.
Also, there are fees to be paid:Loan fee 1% of amount borrowed. Recording fee $24.00, future release fee $10.00 appraisal fee $350.00, attorney fees $250.00 or more, GRMA fee $6.50.Some banks will pay these fees if you are getting a equity line.
Equity lines payments are about 2% of the unpaid balance monthly.
Second mortgages are set payments each month.So you will have your existing mortgage payment, a second mortgage or equity line payment and a payment on your new home.When your existing home sales your first and second mortgage would be paid off at time of closing.