Reasons for the Need of Bridge Funds by Borrowers.
Bridge funds, also known as bridge loans, are a type of short-term loan that can be used to bridge the financial gap between the amount of money needed to close a property purchase and the amount that will be available from the sale of an existing property.
The loan is designed to be repaid on the day the sale of the existing property closes. To qualify for bridge funds, you must have a firm sale agreement in place, which means that all conditions, such as financing and home inspection, must be satisfied.
Typically, you can finance up to 80% of the combined value of both homes. Bridge funds are often used in competitive real estate markets when buyers need to close a purchase quickly and do not want to wait for the sale of their existing property to be completed.
While a bridge loan can provide the flexibility to close a purchase transaction before the sale of an existing property, it can also pose a greater risk since it involves taking on a larger loan to cover the purchase of a new property. It is recommended to speak with a mortgage professional before purchasing another property.
The loan is designed to be repaid on the day the sale of the existing property closes. To qualify for bridge funds, you must have a firm sale agreement in place, which means that all conditions, such as financing and home inspection, must be satisfied.
Typically, you can finance up to 80% of the combined value of both homes. Bridge funds are often used in competitive real estate markets when buyers need to close a purchase quickly and do not want to wait for the sale of their existing property to be completed.
While a bridge loan can provide the flexibility to close a purchase transaction before the sale of an existing property, it can also pose a greater risk since it involves taking on a larger loan to cover the purchase of a new property. It is recommended to speak with a mortgage professional before purchasing another property.
