The Buy Now Sell Later is an innovative variation of the bridge loan or swing loan. It is a short-term financing option that helps bridge the gap between the purchase of a new home and the sale of the borrower’s current property. This unique financial product is designed to provide immediate funds to borrowers who are in the process of selling their current house and need the funds from the sale for a down payment on their new home. 

A Buy Now Sell Later loan will typically span a term of 4 months, with the expectation that they’ll be repaid as soon as the borrower’s current home finds a new owner. The beauty of this loan type lies in its flexibility. It allows access to the current home’s equity, up to 75% LTV,  to be used as down payment on a new home.

It paves the way for borrowers to make a non-contingent offer on a new home, ensuring they aren’t tied down by the sale of their existing property. It also removes the current home’s mortgage payment from their liabilities, enabling an easier qualification.

Advantages and Disadvantages of BNSL Home Loans

BNSL loans offer several advantages and disadvantages for homeowners who are in the process of selling their current home and purchasing a new one.

One of the main advantages is immediate access to equity in the current home, which allows homeowners to bridge the financial gap between buying their new home and selling their current one. This can be especially beneficial for those who need the funds to make a down payment on their new home or cover closing costs.

Another advantage of BNSL home loans is the mortgage payment on the current home (if applicable) is not included as a debt. This can help alleviate financial strain during the qualifying period.

For many, the BNSL home loan is the only option to move forward with their new home purchase without waiting for their current property to sell.

However, it is important to note one downside of the BNSL  home loans. This disadvantage is the cost. The standard fee charged is 2.4% of the sale price of the current home.  This fee is paid from the proceeds once the current home sells

The bottom line is that Buy Now Sell Later home loans are an amazing tool that enables buyers to purchase a new home without having to sell their current home at the same time. I offers immediate access to equity in the current home and removes the Must Sell contingency from an Offer.

Be sure to give us a call to discuss this option further and to get your questions answered!