Many individuals or families who already have a foreclosed home, have a need to change their residence. It may be, for example, because they need a bigger house when the family expands. Or because they need to move for work reasons. Or switch to a better home.

But as we all know, a house not be bought or sold in the overnight. When selling, do not rush, and we must try to get the highest price possible. And the house which we move will often be new and acquired work on the developer level, and therefore is not finished (and sometimes not start). Although we can also buy a used house.
How have the money to buy a new home without having sold the current home?

Most financial and credit institutions offer their customers products called Construction Financing, Bridge Loan, Mortgage Exchange Home and other similar names. The operation of these products is generally similar, with the peculiarities that may have each entity.

Basically, it lends money to cover the cost of re-purchase (or reserve entry, transfer, notary and registration for signature, etc..) Mortgage in exchange for the two properties. How many times have not yet signed the new purchase, the loan is generally personal to become, at the time of signing a mortgage.

The bank will give a maximum period for us to sell the current property since it gives us credit (may be 24 months, 36 …). During this period we will pay only interest or extending reduced rates to sell the old property.

Another method is that the bank gives you a new mortgage (mortgage also provided that the old property) and in the transition period until the sale of previous housing only pay the new mortgage. Once sold, this second mortgage increases your interest or fees to compensate for the loss suffered by the entity for not paying the old mortgage during the transition time.

Each entity, as mentioned, has its peculiarities in this type of product (about finance up to 100% of new housing, some not, some offer longer terms, other children etc.), So it will suit us particularly collect offers from several banks and savings and compare and negotiate properly to get the lowest possible cost or the best conditions.

In this sense, we must ensure that the transition period is long enough to achieve the intended purpose, namely that we will not burdened by the need to sell. Moreover, we should not be taxed by the commission done to shorten the transition period if we sign the new deed earlier than expected.
Advantages of bridging loans

In short, this type of product offers several benefits for people who want to move house. First, allow selling without haste, and therefore do not undersell. And in turn, allows you to purchase a house without selling the previous one, so we do not lose opportunities to buy the house you want and save us from future price increases (the seller is not expected to sell to give money ).
Disadvantages of bridging loans

But it can also have drawbacks, because having to mortgage the two properties, incur double expenses for notarial, registration, taxes, etc.. Moreover, we do good numbers, to ensure that future financial situation with the new credit will be manageable.

In any case it seems the perfect product for home without seeing change prompted by the rush to sell and buy.