An “all cash offer” loan works similarly to a consumer purpose bridge loan — they help current homeowners get cash to purchase or build a new house while they try to sell their existing home.
All cash offers bypass the time-consuming steps that tend to bog down the traditional mortgage process — applying for a mortgage, providing numerous documentation, and the lengthy underwriting process.
For people in a hurry to buy (or sell) a home, all-cash offers can be pretty attractive and a useful tool in securing properties in a highly competitive market. For others, all-cash loans may be their only option to purchase another property.
If you’re a homeowner looking to buy your next house with all cash while trying to sell your existing home, then this article is for you.
Why use an all cash offer on a house?
Today’s housing market still remains highly competitive for buyers as there are more people looking to purchase homes than are currently available.
In a seller’s market, homebuyers often have even less time to bid on homes, as they’re often taken off the market as soon as they have entered it.
For this reason, unfortunately, many people are dropping out of the housing market, feeling like they are unable to compete against the rest of the buyers.
For other people, time simply isn’t an option — they are relocating for work and desperately need to buy a new home before they’re able to sell their current home.
In both instances, these homebuyers can greatly benefit from getting an all-cash bridge loan to help “bridge the gap” between their living situations.
The homebuyers will find they can get a competitive advantage in bidding wars when they present their all-cash offer to the sellers. And the family that’s relocating to another state can get access to fast cash to purchase a new home as quickly as possible.
What’s your loan scenario?
Benefits of an all cash offer
When it comes to beating your competition to purchase homes in a hurry, all cash offers are king. Regular offers and traditional mortgages are too tedious and time-consuming for most sellers who are in a hurry, which is most of them.
Let’s examine a few reasons why all cash offers are preferable to sellers:
- Drastically faster closes, as there are fewer delays
- Deals are not contingent on a mortgage getting approved
- House may not need to be appraised
- May be able to sell the house “as-is”
- Less risk for the seller
- It is the quickest way to sell a house
Here are the benefits of all-cash bridge loans for the borrower:
- Improved negotiating power with seller
- A strong competitive advantage over potential buyers
- Bad credit isn’t a factor
- Can also be used as the down payment on a new home
- Funds can be used to build a new home while waiting for the current home to sell
- Fix and flippers can snag great properties in a matter of days
- You can put a contingency-free offer on your new home
- No need to pay for private mortgage insurance (PMI)
At Marquee Funding Group, we offer hard money bridge loans that work similarly to “all cash offer” loans. You can close a hard money loan in as fast as 24-48 hours depending on the lender.
Whether you’re moving out of town and need a house fast, need money for a downpayment, or you need access to cash to win a bidding war, all cash bridge loans might be the perfect solution for those looking to purchase a new house quickly and more easily than traditional mortgages.
How to make an all cash offer
With an all cash offer, buyers will realize the home buying process will be different than the traditional mortgage — it’s generally a much quicker closing process.
Here’s a common scenario on how to make an all cash offer on a property:
- If you want to purchase the home, contact a private money lender, such as Marquee Funding Group, to apply for the all-cash bridge loan.
- You find a house that came available on the market that you’d like to purchase.
- You tour the house to make sure there aren’t big structural issues.
- Working with the private lender, you will work out a hard money bridge loan that is based on your current assets, and not necessarily your credit report or credit history. Interest rates and repayment terms will be negotiated during this process.
- Depending on your repayment history or relationship with the private money lender, your all cash bridge loan may be processed as quickly as 24-48 hours.
- Once you’ve acquired your all-cash loan, you can make an all-cash offer with the home seller, showing the bridge loan as proof of funds.
- Although inspections and appraisals may not be required, it’s still a good idea to go through to make sure the property isn’t damaged or defective.
- Both parties will sign a contract of sale.
- Make sure to pay monthly bridge loan payments on time while you sell your existing home.
How to get a bridge loan
Bridge loans are offered through private money lenders and traditional lenders because of their usefulness in helping borrowers purchase properties in time-sensitive situations.
To get a bridge loan with a traditional lender, such as a government-backed bank, you’ll need to provide documentation, including:
- Debt to income ratio
- Amount of home equity
- Credit card score, including credit history
- Proof of household income
However, applying for a bridge loan through a private money lender, such as Marquee Funding Group, is much simpler and offers more flexibility.
To get a bridge loan with a private lender, you’ll need to discuss the following with your lender:
- Submit your loan scenario
- Tell us about the property
- Let us know if this will be your first, second, or third mortgage
- Submit the amount of money required for the loan
- Tell us how much your current home is worth
- Give us your estimated credit score (don’t worry, it’s not as important as you’d think)
- Submit other documentation
- Give us any other details necessary for this deal
At Marquee Funding Group, every deal is unique, and each of the loans is based on common sense and the merits of the deal.
Because we are funded by a private group of investors, we aren’t bound by government red-tape and are more willing to make deals that may be deemed “high risk” by traditional lenders.
If you are in need of an all cash bridge loan in a hurry, please let us know, and we will work quickly to get back to you to see if we can make a deal.
Apply for your all cash bridge loan today with Marquee Funding Group
Marquee Funding Group is an experienced team of savvy real estate investors and loan originators.
We offer a wide variety of loan products that other private lenders simply can’t compete with, such as offering consumer-purpose, owner-occupied loans. If you’re a homebuyer looking to buy your next home with all cash, please submit your loan scenario to see if we can work out a timely deal with you.