A Bridge Loan is a short-term financing solution that can provide quick access to cash for individuals or businesses facing a financial gap. This type of loan is commonly used in real estate transactions when a borrower is buying a new property before selling their existing one. With a Bridge Loan, the borrower can use the equity in their current property to secure financing for the new property. This can provide flexibility in real estate transactions and help avoid contingent offers. Bridge Loans can also be used to address short-term cash flow needs for businesses.
What Is A Bridge Loan?
The Benefits of Bridge Loans
- Provides quick access to cash
- Allows for flexibility in real estate transactions
- Can help avoid contingent offers
- Can be easier to obtain than traditional loan
Who Should Consider a Bridge Loan?
- Homebuyers with a current home to sell
- Buyers that need down payment funds out of existing home equity
- Real estate investors
- Business owners with short-term cash flow needs
- Have a signed purchase agreement on existing property
- Provide proof of income and creditworthiness
- Have a clear plan to repay the loan such as listing agreement
- Have adequate equity in current property to cover loan
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