Buy then Sell Options
All right, by then, sell options. I really like the 401k option, the reason why it’s the cheapest and easiest form of interim financing for your client. So this is kind of a heated topic. And I look at it from the perspective of what’s best for my client, what’s best for our client, what’s best for your client. Cheapest and easiest form of financing is I take a 401k loan of fifty thousand dollars. I go buy my next house, I sell my house after I’ve moved in.
So I have all the convenience. I take the fifteen thousand, fifty thousand dollars of equity that I got from selling my house and I pay off my own loan.
Done very easily. Minimal costs, minimal stress, very good for the client. There are a lot of things that floating out there and these other options are really good options for convenience, but maybe not the best for your client. Some of those are bridge loans. So a bridge loans. Brazilians are awesome for the bank. Bank makes really good money because they’re doing two loans, right? They’re doing your bridge loan and then your permanent financing. Sometimes they do those in two separate closings.
Sometimes they do them in one closing. Regardless, that increases the cost to your client. So if they have the ability so I kind of look at it and like this tiered approach, if your client has the ability to maybe get gift funds from a family member, borrow from your 401k if they have any other option to avoid double the cost, that’s the best course of action for them.
The bridge loan is really convenient as well, costs increase and you could potentially, if there’s an issue of, let’s say the market turns, let’s say there’s something wrong with the house and it takes longer to sell. Now, our client could potentially be stuck with two mortgages, a longer, more expensive bridge loan option, because the bridge loan terms three, six, nine, they’re usually not 30 year terms are much shorter because the expectation is that shorter seemed like a great idea.
So, yes, banks seem like a good investment. Thanks. That must be Mike. So just know that there are a lot of other options that a lender who cares can go over with your client. If the first if the very first suggestion, the lender says, is let’s do a bridge loan, well, that’s what’s best for the lender. So a lot of times clients have the ability to they can call their their mom or dad.
They can call their brother and say, hey, man, can you give me fifty thousand dollars to buy this house? And when I sell my house, I’ll give it back to you. I see that happen from time to time. But if you can avoid double the cost, double the headache, your clients can be a better spot. How does that sound? Other questions on Bridgland, other than Mike’s comment to open a bank? Yeah, we could open a bank. Anything else here? He locks or something you can use as a down payment to to bridge that gap.
I had a client who opened up a headlock on their house in like June ish, and they use their heels as the down payment for the purchase in December. So. All right. Shana has a pretty detailed questions.