VLOGS + BLOGS

Bridge financing can be very useful. A bridge loan is a short term loan that allows you to bridge the gap between the sale of your current home and your new one. In an ideal scenario you'll want to close on your current home and then close on your new home the following day.

When you want the bridge loan is when you have to close on your new home before your buyer closes on your current home. Essentially it is a way to carry a mortgage on both properties.

I'm finding a lot of people do not realize that they MUST have a firm deal on their current home to get the loan. A firm deal means there are no conditions/ contingencies on the deal and the deposit has been paid by the buyer.

For anyone that is selling and buying it is good practice when speaking with your mortgage broker to find out if you qualify for a bridge loan just in case, on the off chance you're not able to line up the closing dates. Understanding if you qualify is one part, getting firm deal on your home is another. Both need to happen to get the money.

Some sellers want to put themselves in a position where they need the bridge. That way they can slowly transition from the old property to the new property. Bridge loans are expensive, banks are taking on more risk so the interest rates are higher. Right now/ at the date of this video you'd be looking at $30.00 per day per every $100,000 borrowed. It's expensive but can be useful. Worth it to some, not to others.

Lastly, understand all of your options early so you can make informed decisions when the time comes. That's the name of the game. Questions? Reach out to Glenn!