Question:

How to qualify for a bridge loan if I have bad credit?

Answer:

Even if you would be having problems getting a conventional loan, if you know how to qualify for a bridge loan, you know that credit score and income do not matter in the bridge loan case.

What bridge loan lenders seek is a guarantee that your bridge loan has secured exit - for example, knowing that your house will sell and it will cover the bridge loan amount is a predictable exit. However, the rate you will get if you have less than perfect credit may be higher than if your credit is good.

A bridge loan may be used to cover only for the down payment of a new home; or sometimes a bridge loan will apply towards the remaining mortgage on your current property, and the remaining funds less the bridge loan closing costs and six-month prepaid bridge loan interest will go towards the down payment for a new house.

In any case, with bad credit or not, if your house doesn't sell within six months, you usually begin making interest-only payments on the bridge loan. If it sells in less than 6 months, any remaining prepaid interest is billed back to the customer and the bridge loan is paid off. Now, the buyer can go for a permanent mortgage.

Also, qualifying for a bridge loan may require that you have more than one property, especially if you are seeking 100% financing. Additionally, equity in your old home is required and taking a bridge loan is especially beneficial for borrowers who want to be relocating soon.

Qualifying for a bridge loan makes it possible that you don't have to liquidate assets in order to get money for the down payment of your new home, and your credit does not affect your bridge loan that much.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
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