Posted: 5 Feb '17

The Good and Bad of Bridge Financing

The Good and Bad of Bridge FinancingSituations can arise in life where you need fast access to a significant amount of cash for a short period. While there are many business instances, the most common of these situations is when you have listed your home for sale and before it sells, you find your dream home. You must come up with a down payment on the new home or risk losing it, yet your money is tied up in your current property. In such cases, bridge financing can help you purchase your new home or complete a business transaction. As with any loan product, there are good and bad points to bridge financing in Edmonton.

The Positive Side of Edmonton Bridge Financing

Bridge financing is the solution to situations where you require money for a short period, but are cash poor. In most cases, traditional lenders look upon these circumstances as too risky and do not offer such a product to people who have poor credit or a high debt ratio. Your Edmonton mortgage broker however, can help you secure this financing against the property you own, ensuring you can complete your new home purchase, or in the case of business, close on the deal that will improve your revenues. When you work with BMC Mortgage & Investments, here are some of the benefits you can expect:

  • Fast approvals and closings because we know time is of the essence
  • Associated fees are built into the mortgage because we realize you don't have readily-available cash
  • Prepayment options designed to benefit you
  • Competitive rates because we have a wide variety of lenders to work with

Our aim is to provide you with the short-term financing you need in a manner that benefits you.

The Downside to Bridge Financing in Edmonton

As with any type of extended credit, there can be a downside to bridge financing for Edmonton homes and businesses. While there are risks involved, working with your mortgage broker to secure terms and conditions that work for you will help prevent any of the potential pitfalls and ensure you have the best deal possible. Some of the issues can include:

  • Increased financing costs due to the short loan period or bad credit
  • High payments to meet the short time conditions on bridge financing
  • Bridge financing is often dependent on the sale of an asset to pay off the loan, so if said asset does not sell, there may be difficulties

While there are some risks involved with bridge financing, they are usually insignificant when it comes to securing a deal on your new home or a business transaction that will increase your revenue substantially. It is always best to review your situation with your mortgage broker in Edmonton so you can determine if this financing option is in your best interest.

Are you looking to close a deal and require short-term financing so you don't miss out? Contact us to speak to our professional private lenders of BMC Mortgage & Investments. We're here to help