Coldwell Banker Gundaker

Question:

George,

I heard that a person can get a loan in a situation when you want to buy a new house before selling your current house. My husband and I are interested in doing something like that. What is the name for that type of loan

Sara, St. Louis Missouri

Answer:

Sara,

You’re referring to a bridge loan. Bridge loans are very risky and we rarly recommend them.

Bridge loans put you in a situation where you have two mortgages while you wait on your current home to sell. You’re betting that your current home sells, but not all homes sell as fast or for as much as you might think. We’ve had several families in the last few months call us who are on the verge of foreclosure resulting from a bridge loan.

You should not close on a second home until you have sold your first home. However, you can make an offer on a home and make it conditional on the sale of your current home. Worst case scenario, you sell your current home and rent from the new owners until you can close on your new home – people do it every day.

George

Coldwell Banker Gundaker St. Louis Missouri