What are the Benefits of Bridge Financing?
If your financial situation is good and you have outstanding credit you will probably qualify for a bridge loan. Bridge financing can be used for many different things. It has benefits for people that need to secure money quickly and for a short amount of time. This type of funding is called a bridge because it usually bridges the gap to a more traditional kind of financing.
Bridge Financing in Edmonton
Homeowners can take advantage of bridge financing when they are selling their home and looking to move into a new one. If a homeowner finds the house that they would like to purchase before they have sold the home, they are currently in, or the sale will not be final before they need to make a downpayment on their new home, bridge financing can be used.
The homeowner takes out a bridge loan against the equity that they have in the home they are selling to make the downpayment on their new home. This is very helpful in situations where the house being sold is not sold right away.
Another case where a retail consumer may take advantage of bridge financing is when they are looking at a quick sale home like a foreclosure or even something on auction, and they need cash fast to secure the purchase. A traditional mortgage would take too long to deliver money to the sellers, so the buyer can use their own collateral or equity to obtain bridge financing to make the purchase.
How Bridge Financing Works
It is a very short term loan that is paid off in a matter of weeks to a few years, depending on what it is being used for. These loans have higher interest rates than a regular mortgage because they are considered riskier than a traditional home loan.
BMC Mortgage can help you learn more about bridge financing, give us a call!.