Securing a bridge loan can be a strategic way to transition from one home to another, especially during the bustling summer real estate season. Bridge loans offer temporary financing that enables homeowners to purchase a new home before selling their current one. With the housing market often heating up during the summer, this can be the ideal time to make the most of this financial tool. In this article, we’ll explore seven reasons why summer is the perfect season to secure a bridge loan.
Increased Housing Market Activity
Summer is known for its heightened real estate activity. Families prefer to move during this time as children are out of school, making it easier to transition into a new home before the next school year begins. Additionally, longer daylight hours and favorable weather encourage buyers to view homes. If you’re buying a house before selling yours, a bridge loan ensures that you can make a quick offer without waiting to sell your existing property.
Bridge loans provide the flexibility to act fast in competitive markets, especially during peak seasons when homes may sell quickly.
Faster Home Sale Turnaround
Since summer is often the busiest season for real estate, homes tend to sell faster. If you’re planning to sell your current home after purchasing a new one, you are more likely to secure a buyer quickly, reducing the duration of your bridge loan. This means you can minimize the amount of interest you pay on the loan, making it a financially savvy move during the summer.
When homes sell swiftly, the overlap between purchasing and selling is shorter, and bridge loans help bridge that critical gap, reducing financial strain.
Better Home Availability
The increased housing inventory during summer gives prospective buyers more options. Whether you’re upgrading, downsizing, or relocating, the broader selection of homes makes it easier to find a property that meets your criteria. However, the competition can be stiff, and having a bridge loan allows you to secure your new home even if your current one hasn’t sold yet. You won’t have to compromise on your dream home while waiting for your existing property to close.
Leverage Your Equity to Secure Your Dream Home
A bridge loan allows homeowners to tap into their home’s equity to fund the down payment or the entire purchase of a new property. During summer, when competition for homes is fierce, having the financial flexibility of a bridge loan can give you a competitive advantage. Sellers often prefer buyers who can make a solid, non-contingent offer. A bridge loan removes the contingency of selling your existing home first, making your offer more attractive to sellers.
This flexibility can mean the difference between landing your ideal home and missing out on it.
Avoid the Stress of Temporary Housing
Without a bridge loan, many buyers face the challenge of finding temporary housing while they wait to close on their new home. This can be expensive, stressful, and time-consuming. By securing a bridge loan in the summer, you can move directly from your old home into your new one without needing to rent or stay in hotels. This seamless transition can significantly reduce the hassle and uncertainty often associated with moving.
Especially in a fast-moving market, avoiding temporary housing is a major advantage.
Tax Benefits
Bridge loans often come with short terms (usually 6 months to a year), and while interest rates are generally higher than those of traditional loans, you may be able to deduct the interest on your taxes, depending on your financial situation. Summer is an excellent time to consult with a tax professional to understand the potential deductions available to you when using a bridge loan to secure your new home.
This added benefit makes bridge loans not only a convenient but also a cost-effective solution for short-term financing.
Strategic Timing for Financial Planning
Summer tends to be a time when many individuals and families evaluate their finances, especially with mid-year in sight. It’s a great time to meet with financial planners or mortgage professionals to assess your options. A bridge loan could be the right move if you’re looking for a way to buy a house before selling yours. By acting during the summer, you can ensure that your finances are in order and take advantage of the busy real estate season to secure a favorable outcome.
Conclusion
Summer presents the perfect opportunity to secure a bridge loan for your new home due to the increased real estate activity, faster home sale turnaround, and broader home availability. A bridge loan allows you to tap into your home’s equity, avoid temporary housing, and act quickly in a competitive market. With potential tax benefits and a well-timed approach to financial planning, a bridge loan can help you transition smoothly into your new home while minimizing financial stress.
If you’re looking to buy a new house before selling yours, summer is an excellent time to leverage the benefits of a bridge loan and secure the home of your dreams.
