T1B

Mrs Seater and I are buying a condo for my in-laws. They are going to sell their place in Corpus and move to SAT. When their house sells they will put 75% of the proceeds towards the condo.

We are considering taking out a 5/1 ARM, or having them get a bridge loan at 75% of the expected sale price of their place. The bridge loan seems almost too good to be true, given that we are only paying the interest until their house sells. Just wondering if any of you have ever used one.

The 5/1 ARM isn't a bad fall back as we would only have to put 5% down. Then with the sale of their house we would pay that off in somewhere between 6-18 months.

Just wondering though on any experience you might have with bridge loans.

TIA

I never bought a bridge.

I have a bridge I can sell you.

Almost had to do something a couple of years ago when we were thinking of buying a new house. We could like pay about 80% of the cost of the new home with the proceeds of our sale didn't want to have a contingency. It seemed like a good way to do it, but we changed our minds and stayed put. Our property taxes would have doubled due to the assessment on a new home.

That loan on a bridge we almost bought in Florida didn't go through either.
Just too damn slow on the bridge joke... :brad:

I have done several bridge loans in connection with real estate projects. Mostly when we needed a bunch of cash to do a renovation, when we already had at least 100% equity in the property on paper at least. We would make a deal with a property owner giving them 50% down and they needed to hold the balance of the note for 8 months at 5%. We then used our 50% equity position to get a bridge loan that gave us the fast cash we needed to do the renovations. We had 6 months to pay the bridge loan back. We then would twist on the property owner a bit and see if we could get 1% off the price if we paid them 2 months early in addition to less interest.

We did a couple where we had owned property and needed about 200K to do the build. We put the property up as collateral, and then updated the lien notes as we progressed on construction and had to have the house done and sold in 6 months or we needed to get a mortgage on it and pay the bridge loan back. We were paying prime plus one and some document fees. The banker was cool with that as he was 100% secured at all times and we never had any issues selling and paying the loan back.

Bridge loans are usually pretty straight forward, the lender is usually 100% secured at all times with some kind of back financing plan available if the terms of the original bridge loan cannot be met. Those backup plans are usually fairly punitive in terms.

The bridge loan we are considering would be 100% backed by the in-laws fully paid house. When it sells we repay the note. In the meantime we pay 5%.

You guys are still missing a few of the expected bridge jokes.

Derron wrote:Bridge loans are usually pretty straight forward, the lender is usually 100% secured at all times with some kind of back financing plan available if the terms of the original bridge loan cannot be met. Those backup plans are usually fairly punitive in terms.

A bridge too far?

Papa Willie wrote:"I'm awfully sorry, but I'm afraid we're going to have to occupy your house."

Like these guys?

BSmack wrote:

Papa Willie wrote:"I'm awfully sorry, but I'm afraid we're going to have to occupy your house."

Like these guys?

Haha

I don't get it

Occupy Screwy! He's a capitalist stooge!

^^^^^^^^^^^

I'm not ranking this... :|

Left Seater wrote:You guys are still missing a few of the expected bridge jokes.

I'm trying to work No Trump into it, but I got nothing.

Goober McTuber wrote:

Left Seater wrote:You guys are still missing a few of the expected bridge jokes.

I'm trying to work No Trump into it, but I got nothing.

You'd have even less if you tried to work in spades as trump. Or hearts.

Diamonds & clubs, otoh, are aces.