Bridge loan

[taxlady49]

Client has a bridge loan that paid off the mortgage on home and provided down payment on new home. Is this debt considered acquisition debt or home equity debt?

We obviously would like to take it as acquisition since the amount exceeds the limits for home equity debt

The process is really backfiring as the original house has yet to sell and client will soon have to make a huge interest payment.

I thought I understood the process but the more I read, the more I get myself confused.

Thank you,

Barb Stevens

University Hts., OH

[lbbwest]

Client has a bridge loan that paid off the mortgage on home and provided down payment on new home. Is this debt considered acquisition debt or home equity debt?

We obviously would like to take it as acquisition since the amount exceeds the limits for home equity debt

The process is really backfiring as the original house has yet to sell and client will soon have to make a huge interest payment.

I thought I understood the process but the more I read, the more I get myself confused.

Thank you,

Barb Stevens

University Hts., OH

Follow the funds. The amount that was the down payment on the new home is acquisition debt, the amount to refinance the old home is refinance debt. lbb