Bridge loans

Does anyone here know about Bridge Loans. I am selling my townhouse next Summer and moving to San Diego. I would rather know I have a place to move into before I sell my place here, so a bridge loan would be the logical option. I don’t care that much about the interest rate since it would be short term, but I would be retired by then and could not normally qualify based on income.

Bridge loan is higher percentage like 10%-12% may be 6-12 months period. It is almost like hard money loan given to you to buy the new home using that money. You can pay back the bridge loan by selling you home later.

I have not used it, but my finance person informed me about bridge loan when I was trying to buy new home and sell my current home.

But, I did not like that 10%-12% rate and risk associated with it.

Blog says "There are many sad stories about homeowners who took bridge loans, and our best advice would be, ‘Don’t do it,’

The best way for you to move out to temporary residence (rent) at San Diego, sell your home. Once you have money, then buy a new home without going into any bridge loan.

IMO, it is not worth bridge loan for individual buyer. This may be worth for developer or business RE person who can get cash for typically short duration.

Sherriff-- I have good friends who just moved to San Diego. .Were not sure what they wanted, decided to rent out their home in RWC and rent down there…Keeps their options open…After living there one year they will know the local market and won’t miss out on appreciation, well at least in the BA…Rents were about 40% less down there… it is a money making arbitrage. …about $2000/m difference. .

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+one, I agree esp Bay Area - Evergreen (I think so) homes.

Jil and Elt1, thanks for the advice. After discussing this again with my wife, we have decided to take a “homebuyer” vacation in San Diego this spring. Check out various neighborhoods, pick an agent, look at some homes, so we can be ready to pull the trigger when we get there. We can probably stay at a “Residence Inn” type of place for a few weeks, and then if we are not in contract yet we can get a short term rental

If you rent you primary, have one year lease. The lenders will agree consider 75% of rent for your income calculation. This way, you eligibility is higher.

La Jolla is expensive (Real estate) neighborhood in San Diego as many like to stay for the beauty. If affordable, that is better in San Diego.

La Jolla would not work for me as I want to retire without a mortgage and according to the prop 13 reciprocal counties agreement the new property has to be less expensive than the old one to qualify for keeping your tax base. But it is a good area.

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Sheriff, if you have lots of equity in your house, you can try to get HELOC. Then use the Heloc as down payment to buy a house in San Diego. When you sell your SJ house, then pay off the SD house.

Make sure you actually like to live in SD long term.

There is special formula applied on HELOC. HELOC will drastically reduce your future eligibility while cash out will not reduce.

Just minor change, do not go for HELOC, but go for cash out refinance. Cashout refi must be done while you are there as primary residence so that you lock at low rate.

I recommend staying away from the beach…too foggy, expensive and crowded. .Go inland on a foggy day till you find the sun and then find a place with an ocean view…