A bridge loan is a short-term loan provided to individuals who may need funds temporarily between the sale of their current house and the purchase of the new house. Basically, this money is used to help you buy your new place before your old home is sold. Typical reasons for getting bridge loans are:
- if you want some extra time to renovate the new home before moving out of your current home and into the new home
- if the seller will not give you the closing date you want
- if the extra time on a sale or a faster purchase will help in negotiations of the purchase agreements
The process of applying for a bridge loan is fairly simple:
- You are required to have 2 transactions – sale of your old home and purchase of your new home
- You will need to supply your Agreements of Purchase and Sale for both properties, both agreements must be firm (i.e. all subjects removed)
- The bridge loan is disbursed at the same time of your new mortgage
Using a private lender to get a bridge loan can be easier and quicker than going to a bank, and often times with far fewer restrictions. Our lenders will provide bridge loans:
- Based on the value of the property you are selling as security
- Irregardless of which lending institution your current mortgage is with
- Without requirement of your new mortgage to be with a specific lending institution
- In support of portable mortgages, if your current lending institution allows you to transfer your mortgage to the new property to avoid the penalty, but will not provide the bridge loan as well
- If the time between the purchase and the sale is too long, most banks will not provide a bridge loan
To find out if a private bridge loan is right for you, give us call and talk to one of our loan specialists.
