Let’s satisfy Jim and you may Nancy

Jim and you will Nancy have a condo in the city that they plan to promote. He’s a preexisting home loan balance of $3 hundred,000 to the apartment.

Prior to they could promote the newest apartment, it pick property come on the market industry for the an amazing location which they should not lose out on.

It make an application for a connecting financing and also have acknowledged, during which the fresh couple’s current $three hundred,000 mortgage will get the newest connecting mortgage having a maximum loan identity off 1 year.

On new home, the happy couple becomes accepted having good $600,000 mortgage. This means the happy couple have a good $900,100 combined personal debt ($300,100000 existing personal debt plus $600,000 new house financing as the peak obligations).

Situation step 1: The brand new flat is sold

The happy couple deal their apartment 6 months in the future getting $eight hundred,000. In the, $3 hundred,one hundred thousand is employed to clear its initial financial equilibrium with the assets, that was offered.Seguir leyendo