What is a Bridge Loan?

BRIDGE LOAN

A Bridge Loan allows for short term financing. Generally, this is used if you have bought a new home but your old home that you’re living is scheduled to close at a later date.

As a real estate lawyer I often recommend that people obtain a Bridge Loan. Depending on the circumstances.

For example, Homer lives at 123 Springfield Way. Homer has now purchased a new home being 987 Bedrock Place. The closing date for his new home is June 1, 2020 (assuming this is a weekday). However, the closing date for his current home 123 Springfield Way is June 10, 2020 (assuming this is a weekday).

Homer is not independently wealthy. As such, the only way he can buy his new place is having to sell his hold place. Therefore, his mortgage company will provide him with enough money to buy his new place. But since he his closing date for his current home will happen after. He will need to “bridge” the gap in financing.

Mortgage companies as a result. Mortgage companies will provide short term financing or in laymen terms a Bridge Loan.

In a separate blog post I discussed why you shouldn’t buy and sell the same day.

Don’t Get Stressed

Often a realtor may suggest that you should buy and sell your home the same day. This isn’t always preferred.

If you require a Bridge Loan speak to your mortgage company or bank in advance.

REAL ESTATE LAWYER NEAR ME

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Phone Number:	416-505-4901
Email:	ray@rehankhalil.com
Address:	901 Guelph Line, Burlington, ON