Compass Launches Bridge Loan Program

Real estate companies are always trying to find ways to stay competitive and ahead of the curve of trends.  We’ve learned that the major players in the nation, including Zillow, Redfin, and Realogy, are catering to iBuyers.  The nation is seeing an influx of buyers who want to make offers at the ease and convenience of home, by placing offers online.   We are also seeing companies assisting sellers, whether purchasing their home outright or helping them upgrade their home to get more from the market.  This latest venture from Compass, one of the fastest growing real estate companies, is offering bridge loans.

A bridge loan allows homeowners to easily tap into the equity of their current home.  This short-term loan offers homeowners the ability to purchase their new home without having to sell their current home first.  Compass has partnered with two lenders to offer this perk, Better.com and Freedom Mortgage.  These loans are then paid back upon the sale of the home.

Another perk of using the bridge loan program with Compass is their no out of pocket costs.  Once a homeowner applies for the bridge loan, Compass will use its own funds for six months, so the clients do not have any costs.  The funds would cover any closing costs and monthly payments, except for taxes.

This perk also allows homeowners sell their home in their own time and takes away the stress of buying and selling at the same time. 

However, there are definite risks to utilizing the bridge loan.  There is always the possibility of the current home not selling.  If this is the case, the homeowner must pay back the bridge loan.  If the home doesn’t sell in the first six months, the homeowner must make monthly payments to pay back the loan.  If it doesn’t sell after 12 months, the loan must be paid back in full.

Despite the risks, Compass says this type of service is something their clients are requesting.  The program is currently available in select markets and will soon be available nationwide.