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Bridge Loan - Mortgage Loan Need Advice #5139016 06/20/19 06:36 AM
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Dwight_Frye Offline OP
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I just turned 64 and was laid off. I had planned on working another year but the new company that acquired my former employer wanted to replace me with one of their own people. So while drawing unemployment at the moment I doubt that I will go back to work. I can afford retirement now if I want to.

I own my home free and clear and want to buy another home in a different city for equal to or less than the value of my current home. I figured that I would arrange for a short term/bridge loan so I can begin shopping for the new home and be ready to make an offer as soon as I find a place I like. The real estate market in my current location is hot with time on the market typically only 30 days before selling so I wouldn't need to hold a new loan for very long.

I went to the bank that held my former mortgage and they told me that they no longer offer bridge loans. They would only give me 80% of the appraised value as a home equity line of credit and furthermore, since I am unemployed they said I wouldn't qualify since I have no source of income. They suggested that I start drawing money out from my IRA to show income which doesn't sound like a good idea as I will be taxed on it and don't need it. Plus I don't have the other 20% in cash that I may need if I find a new home that is equal in value to my current home.
I checked with 2 other banks and got the same story about a loan. This irritates me as I have an 850 credit score, no debt and 100% equity in my current home in a desirable neighborhood.

What do people do these days when they want to find a new home and then sell their current residence ? Should I go online and look for some private equity firms or lenders ? I may find a new home I like in a month, or it may take a year but I want to have the financing arranged so when i find a place I like I can make a cash offer and jump on it.

I figure that I will only need the money for 90 days once I make an offer on a new home, maybe only 45 to 60 days.

Re: Bridge Loan - Mortgage Loan Need Advice [Re: Dwight_Frye] #5139017 06/20/19 06:41 AM
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I have a great mortgage broker in Silicon Valley. He helped me tremendously to achieve my goal, which was to pay off our home in Los Gatos. His guidance was spot on.
Peter Bernstein at North 1st Mortgage in Campbell, CA.


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Re: Bridge Loan - Mortgage Loan Need Advice [Re: Dwight_Frye] #5139025 06/20/19 07:01 AM
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skyactiv Offline
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Dwight_Frye, be careful because you sound gullible that you'll sign off on something without reading and comprehending if someone tells you what you want to hear.

Last edited by skyactiv; 06/20/19 07:10 AM.

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Re: Bridge Loan - Mortgage Loan Need Advice [Re: Dwight_Frye] #5139057 06/20/19 07:41 AM
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My Sister was in this same situation. She put her home up for sale and it sold right away before she had found another home. She put all of her furnishings in PODs and moved to the new city where she retired. Stayed in an extended stay motel and ended up closing on a house within weeks paying cash for it.


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Re: Bridge Loan - Mortgage Loan Need Advice [Re: Dwight_Frye] #5139066 06/20/19 07:51 AM
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Boomer Offline
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Make an offer on a new home contingent on selling your old home.


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Re: Bridge Loan - Mortgage Loan Need Advice [Re: Boomer] #5139071 06/20/19 08:04 AM
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Donald Offline
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Originally Posted by Boomer
Make an offer on a new home contingent on selling your old home.


Sellers are liking this less and less. Maybe give someone who wants to do that right of first refusal.

I have my home listed. I want someone to come in, sign a contract and close in 30 - 45 days. Not wait until they sell their home. Which they might not be able to.


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Re: Bridge Loan - Mortgage Loan Need Advice [Re: Dwight_Frye] #5139103 06/20/19 08:49 AM
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Can you take a loan against your IRA? Usually there is a 60 day period where you can withdraw and put it back in penalty free. If not, you can choose the loan amount period for up to 50% of your balance.

Re: Bridge Loan - Mortgage Loan Need Advice [Re: Dwight_Frye] #5139109 06/20/19 08:59 AM
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bugeye Offline
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Try a credit union. Different requirements from banks and lower costs.

Re: Bridge Loan - Mortgage Loan Need Advice [Re: Boomer] #5139122 06/20/19 09:16 AM
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Virtus_Probi Offline
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Originally Posted by Boomer
Make an offer on a new home contingent on selling your old home.

This will only work in an area where the real estate market is slow or for an undesirable property.
When we were first shopping where we live now before we sold our old place and decided to build, our broker told us to not even bother with contingency offers because houses were moving quickly there.
When we were selling our last place before that we ended up accepting such an offer, as the market we were leaving was slow and we were concerned about a house very similar to ours about a block away that was also on the market. We told our broker no way to that offer at first, but she did some homework and found that the offer came from a couple who routinely bought houses, spent 1-3 years refurbishing them, and then moved on...she actually visited the house they were preparing to list and told us that she felt it would move quickly as they had done a really nice job and it was still priced well for its area. It turned out well for us as they sold their place in no time....I think our place was a good target for them as it needed some flooring, deck, and landscaping upgrades that we bagged on when we decided soon after purchasing that we were not going to stay long and priced the place accordingly. I guess they ended up either liking the place or not being able to move it as they stayed at least 10 years after finishing their fixing up.


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Re: Bridge Loan - Mortgage Loan Need Advice [Re: Dwight_Frye] #5139145 06/20/19 10:11 AM
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BMWTurboDzl Offline
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- If you don't have an income stream how is a lender supposed to qualify you? Until you fix this issue there's no point in trying to obtain a pre-approval.

"Other People" will sell their existing home prior to buying the current home: This either occurs via simultaneous closing, a closing where you the borrower are allowed to reside in the home you sold for say a month in order to give you time to close on the purchase of your new home, OR where you sell your home and then live in a short term rental until you find your new home. People who have job transfers will sometimes have an employer who will use a relocation company in order to help make the process as smooth as possible.

The "other way" is that a homeowner will "rent" their current home and then buy another after which they sell it their previous home. Obviously these types of buyers don't need the equity from their current home to buy another.



At your age I assume you don't want to move again after this move so it might be worth it to sell your house, find a rental in the town you want to live so you'll have time to find something you really want.

Last edited by BMWTurboDzl; 06/20/19 10:15 AM.

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Re: Bridge Loan - Mortgage Loan Need Advice [Re: Dwight_Frye] #5139151 06/20/19 10:17 AM
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walterjay Offline
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Touch base with a credit union. Friends of mine were in a similar situation and banks wouldn't touch them. Got it all worked out with a credit union.

Re: Bridge Loan - Mortgage Loan Need Advice [Re: walterjay] #5139160 06/20/19 10:29 AM
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Wolf359 Offline
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Originally Posted by walterjay
Touch base with a credit union. Friends of mine were in a similar situation and banks wouldn't touch them. Got it all worked out with a credit union.


As other said, it's all about DTI, debt to income ratio. With no income, banks can't figure out how you're going to pay back the loan just in case you don't end up selling in a year. A credit union might because it'd be a non-conforming loan and it'd just be an in house portfolio loan. Those are usually limited to 5 year ARMs. Also if you have assets in a brokerage account, consider applying for a margin account. You basically get a credit line that you can tap just like cash and it doesn't cost anything and you don't have to pay anything until you tap the line. The options get worse if you don't qualify for a portfolio loan, then you're on to hard money lending which has more lax guidelines as they're basically private lenders that can make up their own rules. Usually they will only go up to 60-70% LTV, charge you points and may have interest rates in the 12% range.

Basically you should just find another job although that probably isn't easy at your age. Or sell your current home first and just rent or stay with someone til you find something.

Re: Bridge Loan - Mortgage Loan Need Advice [Re: BMWTurboDzl] #5139167 06/20/19 10:35 AM
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atikovi Offline
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Originally Posted by BMWTurboDzl
- If you don't have an income stream how is a lender supposed to qualify you?


Umm, savings.

Re: Bridge Loan - Mortgage Loan Need Advice [Re: atikovi] #5139172 06/20/19 10:46 AM
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Originally Posted by atikovi
Originally Posted by BMWTurboDzl
- If you don't have an income stream how is a lender supposed to qualify you?


Umm, savings.


Yeah, doesn't work that way. Why do you need a loan if you have savings? It's debt to income ratio. You borrow the money and pay it back with income you earn. If you're not earning income every month, how are you going to make the monthly payment for the term of the loan? It will probably be a 15 or 30 year loan. You're either going to need that amount in savings or have an income to make that monthly payment.

Re: Bridge Loan - Mortgage Loan Need Advice [Re: Dwight_Frye] #5139191 06/20/19 11:08 AM
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Presumably you have income from your assets, SS if you are taking it yet, and/or pension if you have one.

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