How to get a bridge loan
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Estimate time frames. Project a reasonable closing date if an offer is accepted for a new home. Should the seller lack a qualified offer on the property being sold, the scheduled or projected closing date on the new property becomes ever more important. This often dictates the need for a bridge loan, to permit the seller to close the sale on the new purchase.
Determine the amount of cash needed to close on the new real estate. For example, if you realistically hopes to sell a current property for $200,000 with a first mortgage of $75,000, you should receive around $125,000 in cash when the property sells and closes. Assuming all of these funds are needed to complete the purchase on the new home, this is the amount required for the bridge loan.
Ask the current and new mortgage lender if they offer bridge loans. Many will offer this short-term financing at reasonable terms,
but not all have the ability or desire. However, local banks and credit unions may offer bridge loans as accommodations to loyal customers. Even if the institution does not offer this financing, ask if they would consider working with a good customer awaiting a closing on their current home.
Use the internet to locate other bridge lenders. There are lenders that prioritize bridge loans and many "hard money" lenders also offer this financing. The current real estate offered for sale will usually be pledged as collateral for bridge loans, which ensures that the lender has a good source of short-term repayment.
Carefully analyze the terms offered by bridge lenders located. Compare the terms available from local banks and credit unions with the costs of programs offered by bridge lenders located via an internet search. Since bridge loan borrowers must afford not one, not two, but actually three mortgage loans for a short period, the least costly is the top priority.Source: ehow.com