| When To Consider a Bridge Loan | | | | |
| | | | Designed to be fast and easy |
| As the name indicates, a lender offers bridge | | | | |
| loans in order to create a financial "bridge" | | | | Generally involves less paperwork |
| to get the borrower from one transaction to | | | | |
| the next. A bridge loan is meant to be a | | | | Gives you extra time while waiting on a |
| shorter term loan that is used for interim | | | | specific condition/situation |
| financing while waiting for another | | | | |
| transaction or situation to occur. A bridge | | | | Provides a convenient means for a seller to |
| loan can take care of short term needs while | | | | purchase a new property before selling an |
| looking for the ideal long term solution. A | | | | existing proptery |
| bridge loan is often used to purchase | | | | |
| commercial or foreclosure real estate, | | | | Cons |
| enabling the borrower to close on a property | | | | |
| quickly. Often borrowers utilize a bridge | | | | Interest rates are usually somewhat higher |
| loan until: | | | | than a traditional long term loan, but can |
| | | | still be quite competitive |
| A property is sold | | | | |
| | | | Not designed for long term needs |
| A property is improved or completed | | | | |
| | | | Does It Matter if My Lender is a Member of |
| A property can be refinanced | | | | the Mortgage Bankers Association of America? |
| | | | |
| Credit improves or financial situation | | | | The Mortgage Bankers Association (MBA) is a |
| changes | | | | national association for professionals in the |
| | | | real estate finance industry, which promotes |
| A business has resumed or improved, or | | | | fair and ethical lending practices and |
| changed in a specific way that allows for a | | | | fosters the professional excellence of real |
| more permanent financing option | | | | estate financial employees. |
| | | | |
| What Are the Benefits of a Bridge Loan? | | | | When you need a loan, it is a good idea to |
| | | | select a lender who is a member of the MBA. |
| Bridge loans also known as "Swing Loans", | | | | This helps protect you against fraudulent |
| "Interim Financing" or "Gap Financing" are | | | | practices and unethical companies. The MBA is |
| generally quick, and usually require less | | | | headquartered in Washington, D.C., and |
| paperwork than a long term loan. A bridge | | | | invests in communities across the nation by |
| loan can allows you to make a competitive | | | | focusing on improving the quality of |
| offer on a property without a contingency | | | | residential and commercial real estate |
| clause. Whether you need a loan fast, or just | | | | markets. Lenders who are members of the |
| need a temporary loan while closing on | | | | organization receive frequent market updates, |
| another loan, a bridge loan can be very | | | | educational training opportunities, and other |
| helpful and financially sound solution. | | | | useful information that can enable them to |
| | | | give clients the lowest possible interest |
| Pros | | | | rates, and exceptional service. |