If you’re looking for a way to fund a residential property need, HML Solutions can assist. We offer loans for residential properties so you can can have peace of mind knowing you won’t run into delays due to lack of working capital or other financing holdups. With a residential bridge loan, you’ll have the necessary financing to borrow against the equity or your existing property, so you can purchase a new property.
About our Residential Bridge Loans
If you’ve never made a residential real estate purchase while owning existing property, you have never heard of a residential bridge loan before. Residential bridge loans are a specific loan product that offers short-term financing that usess a borrower’s existing real estate as collateral. When you secure a real estate bridge loan, you are doing so with the intention of purchasing a new residential property. This can help make the purchase easier, and once you’ve secured your new property, your existing property is then sold to pay off your short-term residential bridge loan.
Bridge loans are a great option if you’re a homeowner who is considering purchasing a new home due to an expanding family or changing lifestyle but you don’t have enough cash available to purchase a new home, you may be able to leverage the equity in your existing home to help fund your purchase. Bridge loans are also a viable option if you’re a homeowner who’s interested in changing residences but you don’t have the income to qualify for most conventional home loans. If, for example, you’re retired and don’t have a large enough income but you own property with a lot of equity, a bridge loan may be the perfect solution for your purchase needs.
How Bridge Loans Work
Here’s an example of how a bridge loan works. Let’s say you own your home but you’ve outgrown it and want to upgrade your lifestyle to move into a new home with more space. However, you may not have enough extra cash available on hand to cover a down payment or all-cash offer, but you have a significant amount of equity in your existing home. As a homeowner, you could sell your existing home, find and move into temporary housing, and use the money you make from selling your home to purchase your new home.
Once your loan is closed, you can move into your home home. Or, you could secure a residential bridge loan to borrow against the significant amount of equity you have in your existing home and use those proceeds to purchase a new home. You’ll be able to live in your current home while you look for the right place to live and go through the steps of buying your new home, removing the extra step of having to move while you sell your existing home. Most residential bridge loans are funded within weeks, which will give you enough money to be a competitive buyer in today’s market.
If you choose to obtain a residential bridge loan, you’ll have enough funds to provide an all-cash offer on your new home purchase, which increases the likelihood your offer will be accepted in a sea of competing bids. Once your offer is accepted and you move into your new home, you can sell your previous home to pay off your bridge loan quickly and seamlessly.
Fast Financing: Bridge loans provide hard money quickly, so you can fund your residental real estate purchase quickly. In today’s market, residential bridge loans can offer you the benefit of being able to purchase your new property quickly before it sells. Because houses are selling so quickly, you should be able to rely on selling yours quickly to pay off your bridge loan in a timely manner. You can secure approval in weeks rather than months, which can be crucial when you’re trying to move on a property investment quickly.
Efficient: Residential bridge loans are efficient. Because it taps into your existing property’s equity, it allows you to secure your new residence quickly. This can help you avoid the hassle of trying to sell your current home and moving into a rental or temporary dwelling while you go through the traditional home loan process. With a bridge loan, you can move once, which saves time, hassle, and unnecessary moving expenses.
Less Hassle: With a bridge loan, you won’t be required to prove your income as part of the qualification process. This is because residential loans don’t require the ability to repay loan term that most conventional home loans request, because you’re leveraging your existing property as collateral to pay off the loan once it’s been sold. If you’re self-employed, retired, or lack the necessary income to qualify for a traditional home loan, this is a great option to cut out the hassle. We also work with you if you have a poor credit history or past credit issues such as bankruptcy, loan modifications, or foreclosures. If you’re financially stable and have sufficient equity in the home you’re providing as collateral, we can work with you on your hard money bridge loan to find a solution that works. This is because as asset-based lenders, we’re concerned about the value of the property in question rather than your past credit issues.
Provides Leverage: When you secure a bridge loan, you’ll be able to have more leverage when making an offer on a potential home. Typically, all-cash offers are viewed as the most attractive option to sellers because they remove contingencies from the selling process. If you come in with an offer that’s contingent on the sale of your home before being able to complete your offer may be less likely to be accepted, especially in a competitive real estate market. Because you may not be able to sell your home to come up with the cash to put down, it can make for a shaky real estate transaction. With a bridge loan, you have the money you need upfront for an all-cash offer or large down payment.
Hard Money Bridge Loans
With a hard money bridge loan, we can fund your residential bridge loan request quickly and efficiently. If you are looking to secure a bridge loan for an owner-occupied property, we can handle the approval process in as little as 2-3 weeks. If you’re looking to fund a residential bridge loans on an investment property,we can assist with funding in as little as 5 days. If the loan amount you’re requesting maintains at least 25-30% of the overall equity in your property, we’ll be able to fund your loan quickly.
When you work with financial institutions that offer bridge loans as part of their loan portfolio, they must consider the value of the real estate and overall equity, but in many instances they also focus on the borrower’s income and past credit history. These can be used as leverage to increase interest rates or result in denials. It may also slow down the process, which can cost you time and possibly your dream home. While we look at your home’s overall equity, we don’t worry as much about your past credit and any delinquencies, loan modifications, or bankruptcies you’ve had. We can approve hard money loans in half the time of traditional banks by cutting out the extra steps in the loan process.
We believe that just because you’ve had bad credit or issues on your record such as short sales, bankruptcies, foreclosures or loan modifications, it doesn’t mean you can’t qualify for a bridge loan. If your home has equity, we can look past these issues to help you secure a bride loan.
Even if you’re self-employed or have changed careers and have had issues in the past obtaining a loan from a traditional lender due to the inability to prove your income, we can assist you with the hard money bridge loan process. While most lenders require you to provide two years of employment history, we simply assess your property to see if it has adequare equity to use as collateral.
When you work with a traditional financial institution, you may find that they tend to shy away from offering residential bridge loans because they prefer long-term loans. Since bridge loans are meant to provide short-term financing, it’s less profitable for traditional banks in the long run, which can affect their balance sheet.
When you work with HML Solutions, you’ll find the interest rates on our residential bridge loans vary from 8-10%. Your bridge loan terms can vary depending on the factors such as the location of your property and the loan-to-value (LTV) ratio you requested.
While you may be able to find a lower interest rate by choosing to work with a traditional financial institution to fund your residential bridge loan, you’ll find the approval and funding process will take much longer than if you worked with us. That’s because most banks spend additional time scrutinizing your income, credit scores and any past issues you you may have had which could affect your credit or ability to repay your loan.
HML Solutions is ready to assist you with your residential property financing needs, so get in touch with a member of our team today to learn more about our loan process. We’ll answer your questions, provide a financial consultation, and walk you through the application process from start to finish, so you can receive the necessary funds to manage your purchase needs.