Thinking of getting a Bridge Loan

 All,

I have recently taken a job in another part of the country and am
currently living in a motel while my house sells.  I have started
researching bridge loans as a means of getting into a new home before
my old home sells.  I am thinking about a bridge loan that would not
require any payments for 6-12 months.  Here is my current situation:

We owe $142k on our existing mortgage.  The housing market is not very
good, so we are only expecting to get around $155k for our house.  The
tax value is $153k.

I have read that most bridge loans will only be offered for at most
90% of the original home value.  If they use the tax value, this would
be 90% of $153k, or $137,700.  To cover the rest of the original
mortgage and the down payment on the new home, I am considering taking
out a loan against my 401k, then paying it back as soon as the house
sells.  Our credit should be excellent.

Will we automatically be turned down because our loan-to-value ratio
is higher than 90% even though we can secure the rest through a 401k
loan?

Are bridge loans loaded with fees like standard mortgages?

I would appreciate any advice.

Thanks!
Dan

 

Your life is already complicated.  The last thing that you need
is a messy loan to add to your already messy house sale.  How
about slowing down a bit, realize that it may be a long time
before your house sells.  Find a nice apartment, and sit out
the housing market for a year.  The money that you save doing
this will come in real handy when you are ready to buy a new
home.  But for now, take advantage of the underpriced rental
market.

-john-

--
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John A. Weeks III           952-432-2708            john@johnweeks.com
Newave Communications                         http://www.johnweeks.com
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I agree.  Even if you have a wad of cash in hand, it's often a bad
idea to immediately jump into buying a home in a city you aren't
familiar with.  If you rent for a while, you'll have a chance to
explore the neighborhoods a bit, figure out traffic and/or public
transportation patterns and where you'll go most often for shopping or
entertainment.  

Plus....  it sometimes happens that a new job goes sour within the
first few months or a year.  You find out the company lied to you when
you were interviewing or reneged on promises about your work
environment or benefits, the pointy-haired boss is a moron, you can't
hack the hours and pressure, or OTOH the place is too laid-back and
you feel you aren't being challenged, you just don't like the work,
etc.  If you decide it's not for you and you want to quit, the last
thing you want is to be tied to *two* houses you don't want.  Better to
wait a bit and make sure this is a place you're going to be happy in the
long term before you buy a house.

-Sandra the cynic

 Boy, I agree with the others. You are needlessly trying to move too fast. You
owe a lot on your presenty home. You may not even sell it for enough to pay off
the current mortgage, let alone have anything left to cover a bridge loan. A
rental gives you time to look around for a new place, and get your old home
sold.

--
Dennis