|
|
|
|
| Financing Options for Buyers Who Are Also Sellers |
 |
(September 22, 2006) --
Home owners who want to close on the purchase new home before they've sold their existing home have several financing possibilities to consider.
The traditional bridge loan generally gives borrowers 18 months to pay and a typical 8.25 percent rate for those with good credit. Closing costs are nominal and there are no prepayment penalties. Yet, some experts say this is an expensive way to go.
"You've got to be careful," says David Peskin, president of Mortgage Warehouse, a Melville banker. "If you're not economically set, and if you don't have enough reserves to carry two homes for at least a year or however long it could take, you could be in trouble."
Other possibilities include a home equity line of credit and borrowing from 401(k)s. The home equity line is limited by the value of the home against which it is borrowed. A loan from a 401(k) is limited to $50,000, although a couple can borrow from their separate accounts.
Just a year ago, she would have recommended a customer buy right away without selling if he saw something he liked, says Beth Marten, who owns Home Buyers' Resource Center on Long Island, NY.
Today her advice is difference. "Find a buyer first," Marten says firmly.
Source: Newsday, Randi F. Marshall (09/22/2006) |
|
|
