Bridge Loan
A bridge loan as the name implies is a loan used to bridge the financial gap between monies required for your new property completion prior to your existing property having been sold.
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Bridge loans are short term loans arranged when you need to purchase a house but are unable to arrange the mortgage for some reason, such as there is a delay in selling your existing property. Timing is of the essence when selling one property and buying another. Sometimes if you are looking for a new home and the right property becomes available, it is not always possible to wait until your current home is sold.
The beauty of a bridge loan is it can be used to cover the financial gap when buying one property before the existing one is sold. For example, if you are in a situation where you are buying a property at the same time as selling a property, it's possible that you could be in a situation where you need to complete your purchase before the exsisting property is sold. Or maybe your under contract but the funds from your buyer are not available yet. You are now under pressure to complete on a particular date but do not have the funds available. This is where this type of a loan come in. They are looked on as short term lending to cover a specific short term need.
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These types of loans are widly avalaible they are mostly used to raise capital pending the sale of a property.
With regards to these types of loans they can be arranged for almost any sum of money and can be borrowed for periods from a week to up to six months. Because of the nature of this type of as loan they can usually be arranged at short notice and within a few days.
The loan is similar to a mortgage where the amount borrowed is secured on your home but the advantage of a mortgage is that it attracts a much lower interest rate. While bridging loans are convenient the interest rates can be high.
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When considering a bridge loan please remember that you may be paying not only for the bridge loan too on your existing property. Although bridge loans are convenient, you need to consider the pitfalls too, like the high interest rates. Reason, More risk for the lender.
As seasoned Mortgage Bankers and Realtors, our goal is to help you with financing your home which begins with a personal commitment to you. With over 10 years of experience and closing over 110 million dollars of residential real estate we've helped people like you realize the dream of home ownership by tailoring a loan program that comfortably fits within your budget and not only finding a good home, the best home.
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