Bridge Loans vs Cash Buyer Programs

Bridge loans have been around a long time to help homeowners access equity for their existing home so they can use those funds for their next home purchase. Bridge loans are mortgages that are secured to the departing residence which means in most cases, the home buyer has to qualify for not only the new home mortgage payment but also the mortgage on the "old home" along with the bridge loan. Available funds for a bridge loan are also often limited based on a certain loan to value, less any existing mortgage balances (there needs to be enough equity for the home to sell, including the costs to sell). Bridge loans are a great tool, however they do have limitations.

Cash buyer programs, like NAF Cash, allow home buyers to make an offer without having a departing residence on their next home. As it's effectively a "cash offer", the transaction can typically close in about 14 days, allowing the buyer to move into the home and "rent back" until they purchase the home from NAF Cash. Of course, if a person does have a home to sell they can still use NAF Cash to buy their next home with a "Cash Offer". It's a "win win" for sellers and home buyers dealing with a competitive market with limited inventory. NAF Cash is available for buyers with credit scores of 620 or higher with a down payment as low as 5% for conventional or 0% down for a VA loan with the second transaction (buyer purchasing from NAF Cash).

If you're a real estate agent, I highly recommend that you take the 45-minute class to become certified to make cash offers for your clients. As a listing agent, if you receive an offer with a financing contingency, share this information with the buyer's agent. They can contact me to sign up for the next class or use the QR code on the flyer in the sidebar.

Questions? Please contact me!

Rhonda Porter