anyone know about using a bridge loan to buy a foreclosure then converting to regular motgage loan (mortgages, banks)

[unteagle]

I'm trying to buy a foreclosure home(auction). I was confused by all the info given to me so hopefully someone can break it down for me. My uncle is the VP of one of the banks in town here and when I spoke to him, he said they can do a bridge loan to pay cash for the house.

I then spoke with my lendor that was saying something like you had to wait at least 6 months to convert this to in my case a VA loan and had to wait a year I believe if I didn't want penalties or points or something. I kind of got confused.

I'm just trying to decide if this is even worth my time as the interest over a year on a bridge loan would be quite large.

[Modification Specialist]

Originally Posted by unteagle

I'm trying to buy a foreclosure home(auction). I was confused by all the info given to me so hopefully someone can break it down for me. My uncle is the VP of one of the banks in town here and when I spoke to him, he said they can do a bridge loan to pay cash for the house.

I then spoke with my lendor that was saying something like you had to wait at least 6 months to convert this to in my case a VA loan and had to wait a year I believe if I didn't want penalties or points or something. I kind of got confused.

I'm just trying to decide if this is even worth my time as the interest over a year on a bridge loan would be quite large.

My $00.0002 cents summing up your situation, looking at the information you describe.

A bridge loan with mortgages is when when equity is pulled out of an existing home to buy another property.

A bridge loan usually only covers a maximum of 80% of the new properties market value. This means you must have equity in your existing home or cash on hand to cover the other 20% out of pocket..

Even if you strike a deal with your Uncle, the interest rates can range anywhere from 2 - 4 points above prime.




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