With the bridge loan, you can access a loan with immediate liquidity and with the actual term you need, up to 20 years, being able to cancel at any time, totally or partially, without cancellation fees, and with the possibility of spending a few years of grace, paying only interest. With all these variables, private institutions offer you a loan to suit you, with comfortable installments adapted to your possibilities.
What Are Bridge Loans?
Bridge loans are important when you need quick cash flow while it is available and when it is in demand. This is a short term loan that many business owners solicit until they can get long term loans. Most consumers use bridge loans for real estate transactions. These loans are like bridging a gap; similar to a payday loan that bridges the gap between pay periods. In this case, it has to do with the transaction of simultaneously buying and selling real estate. With a bridge loan, you can have two loans by borrowing against the existing loan; creating a second mortgage. The money in the second mortgage is used for the down payment for a second real estate while you maintain the first mortgage payments until you decide to sell the home and pay everything off.
Requirements
The only requirement for a private bridge loan is that you assure the institution that you will repay the loan by assigning a property as a guarantee of return. This property must be free of and clear and can be yours, a family member, a friend, or a guarantor (if the property is not yours, the owner will usually sign as a mortgagee).
Advantages
You will have the time you need to sell your property or to receive that inflow of money that you so desire. You will obtain good return on your investment because the bridge loan could give you an edge to seeking financial balance. You will be solvent again and you can request more money from the institution with an impeccable file and with the security of being approved. It does not matter if you have debts or have pending liens. You will have additional liquidity for whatever you need as long as you show that you are fiscally responsible.
Conclusion
Do you need timely liquidity because you are waiting to collect money that will arrive soon? Will your bank take a long time to grant you credit and you can’t wait? Do you need liquidity while you manage and wait for the bank credit patiently? Due to circumstances of lack of liquidity, a private bridge loan will help you to successfully complete your real estate project. However, you must have some semblance and be clear that the project will give you a return on investment. There are multiple institutions that offer private bridge loans. Make sure to do your research to find the one that is best for you.
