Bridge financing is short-term financing used when a homeowner is purchasing a new property and taking possession prior to the sale of their current property.
Lenders grant short-term financing, or interim financing, to “bridge” the gap between the closing dates of the transactions and allow buyers to use the equity in their current property prior to actually having that equity available to spend.
This means that purchasers can borrow their down payment for their new purchase from the equity of their current property and essentially own two properties at the same time while waiting for the sale of their current property to close. Upon the sale of the current property, the lawyer will payout all mortgages, real estate commissions, and then repay the bridge loan plus any fees and accrued interest between the closing date of the new purchase and the closing date of the sale of the current property.
Bridge financing is a product that is offered by most lenders, as they have become more popular in recent years. Contact your mortgage specialist for more specifics on a bridge financing plan that fits your needs.
If you need assistance or more information regarding the purchase or sale of a home, or for the re-financing of your existing home, we welcome you to contact our office at 780-469-0494 or email us directly at firstname.lastname@example.org.