How does Bridge Financing work?

Question

We purchased a new home and have already sold our current home. There is a 2 week gap between when we take over our new home and when the new owners take over our current home. What should I expect with regard to the bridge financing and interest rates?

Answer 1

Generally, the interest rates are not usurious, and you may well only have to pay the interest charges on the bridge loan for a period of only two weeks.

Do be prepared, however, to be required to be financially capable of handling two mortgage payments before the lender will approve you for a bridge loan. Remember that your previous home is never truly 'sold' until money changes hands.

The bridge lender will want this financial information in the event that something happens to your buyer before closing which would prevent their close. Then you will have to be prepared to handle two mortgages until another buyer is procured. Does it happen ? You bet it does. I've had buyers DIE a few days prior to close.

Answer 2

You should see what you can do to put off your closing until the new home sells. Do you need a bridge loan for down payment? I would do whatever you can do to not get a bridge loan they are clostly and can cost you about $2000 in closing costs plus most banks charge a 1% origination fee on top of that, since they will only have the loan for a short time.

Answer 3

Bridging finance "bridges" the long gap from the time your property is sold till the time it is registered into the new buyer's name. As of the slow nature of the transfer of the property, parties involved in the transaction are left frustrated and short of cash as their money is tied up in the property transaction.

Bridging finance solutions help you gain access to these funds that may only be due to you at a future date. A client uses Bridging Finance to turn profits, commission or equity on a property transaction into cash, without the hassles normally associated with traditional forms of borrowing such as bank loans.

Answer 4

you're able to desire to work out what you're able to do to postpone your ultimate till finally the type new abode sells. do you like a bridge loan for down value? i could desire to accomplish a little element you're able to do to no longer get a bridge loan they're clostly and could value you approximately $2000 in ultimate expenditures plus maximum banks value a a million% origination value on ultimate of that, because of the fact they are going to least perplexing have the loan for a little while.

Answer 5

If it is only two weeks, you might have to make two loan payments. If you do get a bridge loan, two weeks isnt bad.