Learn More About Bridge and Construction Loans in Newark, New Jersey
Posted: Sep 22, 2017
Building your own house can be a wonderful and fun experience. If you are finally ready to build your dream home, congratulations! It can also be a long and expensive process. Adding to the stressful situation, most people cannot afford to pay for the cost of home construction up front, and getting a mortgage for this type of endeavour can be tricky. What you are doing is basically asking a bank to give you money for something that doesn’t even exist yet! This is why a standard mortgage loan is not usually possible, but you may be eligible for a special type of loan known as a construction loan. As well, often a bridge loan then comes into play as well.
What are New Jersey Bridge Loans and Construction Loans?
A construction loan is typically a short-term loan used to pay for the cost of building a home when a traditional mortgage cannot be obtained. It is usually offered for a set term, typically around a year, to allow you the time to build your home. At the end of the construction process, the house is done and you will need to get a new loan to pay off the construction loan. This may be a bridge loan. Bridge loans are temporary loans that "bridge" the gap between the sales price of a new home and a home buyer's new mortgage, in the event the buyer's home has not yet sold.
When Can These Be Used?
The reason buyers take out a bridge loan is to buy another home before selling an existing residence. For example, you will need to build your new home while you are still living in your current home. At the end of the year, you will move into the home and need to pay off the construction loan, but often you cannot sell your house within a few weeks of moving out. For many, there is a gap when you technically own two homes. This is where a bridge loan comes in.
Who Can I Get Bridge or Construction Loans in Newark, New Jersey from?
This type of funding does not need to come from your large, nation-wide banks and mortgage lenders. There are Newark bridge loan lenders right here in town who specialize in this type of funding. It may seem a little complicated to you, but it certainly is not to these professionals.