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Should I Get A Second Mortgage Or A Bridge Loan?

By Ann White

Should I get a second mortgage or a bridge loan? Read here for tips on how to decide which loan would suit you best!

For many people, coming up with a 20% down payment can be financially straining. For those who want to purchase a home, but do not have the large down payment, getting either a bridge loan or a second mortgage may be necessary. There are various considerations that need to be taken when deciding between a second mortgage or a bridge loan.

Do You Need a Long Term Loan

The first consideration to make when deciding between getting a second mortgage or a bridge loan is whether or not you need the loan for a long period of time. A bridge loan is ideally used for only a short period of time, which is generally less than a year. If you will not have the cash to pay off the bridge loan and need the loan for a longer period of time, you would be better suited by selecting the second mortgage over a bridge loan.

Are You Buying a New Home

The next consideration to make when deciding between getting a second mortgage or a bridge loan is whether you are buying a new home. A bridge loan is often used by borrowers who need a loan to purchase a new home prior to selling their existing home. If this is your situation, you most likely will not be approved for a second mortgage large enough to cover the purchase of your new home.

Do You Want to Refinance

Another consideration to make when deciding between getting a second mortgage or a bridge loan is whether you want to refinance your mortgage. To get a second mortgage, you may need to refinance your current mortgage entirely. However, a bridge loan may not require you to refinance.

Related posts:

1. Should I Get A Home Equity Loan Or Line Of Credit?
2. Should I Go With A Fixed Rate Loan Or An ARM?
3. Should I get a 30-year or a 15-year fixed mortgage?
4. How do I know if I am getting a good deal on a mortgage?
5. How Do I Figure Out What Type Of Mortgage Loan I Need?