The Five Things You Need to Know about Bridge Mortgage Financing

So you bought a new house and your old one has not sold, but you removed the conditions . . . so you need to close on the old one or you will be in a pickle.

This is when bridge financing comes into play. A bridge loan is a temporary mortgage loan used to bridge your two mortgages until you sell your old house.

Here are five things you need to know:

  1. You will need to provide the lender with a firm agreement of sale before they consider a bridge loan.
  2. Your credit must be in exceptional shape and you will be able to meet the lender’s criteria for a bridge. You cannot assume you will qualify for this financing.
  3. You will need to have equity in your current home. The bridge mortgage is secured by the equity in your home and will never exceed the equity in your current home.
  4. Your lawyer will be required to register a mortgage if the sale of your existing home collapses (this is not common).
  5. These types of loans are normally for ninety days; however, there can be a longer term of a year, which means they are expensive.

The lending institution for your new home will normally provide you with your bridge loan. There are also private lenders, but they are normally more expensive.

If you are caught between houses, there is a solution. But with every mortgage, you need to be prepared to go through the process.

Let me know what you think of these blogs in the comment section below.

Bridge Mortgage
By |2018-09-10T03:17:03+00:00March 14th, 2018|Mortgage Types|0 Comments

About the Author:

Diane Bertolin
Diane along with her team have over 120 years of real estate experience between them all from mortgage lending, to land development, construction, and real estate sales. Diane’s knowledge of economics, her fervent enthusiasm to read everything and her overall desire to help people to become financially independent lead her to this point of building her newest business. She joined the Unimor Capital Corporation team in September of 2016. Diane takes pleasure in helping people get the funds they need to get their dream property, but she also tells you when you cannot afford something. Diane strives to get you, your best mortgage or real estate investment.

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