Typically, bridge mortgages are short term loans to help a borrower “bridge” two financial transactions. If you’re buying a new home but have not yet sold your current home, a bridge mortgage helps you to buy before you sell by giving you the funds you need to purchase your new home knowing that your current home will be sold in the near future. Bridge mortgages are usually short term loans of 1 year or less. At the end of the term you’ll need to put your permanent financing in place.
Here at East Wisconsin Savings Bank, we offer a product that is similar to a bridge mortgage but better! Our loan is called a “Blanket Mortgage.” A Blanket Mortgage allows a new home buyer to use the equity they have in their current home to purchase a new property without a required cash down payment. How does this work? When you find a new home, your current home and your new home are used as collateral for your new home purchase. This allows you to purchase a new home without a cash down payment or liquidation of your personal funds.
Once your current home sells, the proceeds from that sale are paid onto the Blanket Mortgage, your payment is adjusted downward to reflect your new lower balance and you’re done! This is your permanent financing. There are fixed rate and adjustable rate options for our Blanket Mortgages. You can use our Blanket Mortgage to purchase a new primary residence, a second home or cottage, or maybe even a rental property. The housing market is very tight right now with limited houses available to purchase. Our Blanket Mortgage will give you the flexibility to buy your new home before your current home sells. You can make an offer to buy your new home without a sale of your current home contingency. Call one of our Member Services Officers today to find out more!