Bridge loan mortgage

Bridge loan mortgage definition :

The purpose of a bridge loan financing is defined in the name. It is temporary loan that allows borrowers to keep or purchase a property until he sells or refinances it with a permanent loan. It is also known as a swing loan. Bridge financing is used by homeowners who who are switching to a new  property, by investors who wish to fix and flip reos, by business owners who need quick money and by other borrowers who need temporary loan on any real estate holding. Interest rate on bank bridge loans are very low compare private hard money bridge loans which can be five to eight percent higher than the bank's rate.

Bank bridge loan financing or hard loans?

Bank can arrange a signature loan to a business owner or equity line of credit to an home owner providing that the borrower have good credit, equity and verified income for the 2 years prior to the application. When the economy is booming banks are easy to arrange bridge loans and when the economy is contracting banks slowdown their approval rate or even stop it all together. When banks are unwilling or unable to lend for any reason a borrower can still get a private investor's hard money loan but only if he has sufficient equity in the property. 

Bridge loans can be arrange for period lasting 6 month to 2 years or longer. In times of economic slow down bridge loans can be risky to the borrower if the loan has a very short duration.  If the borrower does not have a solid exist plan and or if the loan terms are for too short of time he may not be able to get a new loan or sell by the time the bridge mortgage is matured and he could face default and foreclosure .  Two years minimum  loan terms is recommended or at least a provision in the note for automatic extension at the end of the loan term. The extension is granted  by the investor/lender if the borrower does not miss payments,  when all taxes are paid on time and when all other conditions in the trust deed and the note are met.

If you already asked your bank for a bridge loan, got denied or no  response you may try to shop your swing loan among hard lenders of lendinguniverse.com .  Hard loans can be arranged in few days and are based only on the equity in your property Start here to secure your hard bridge loan mortgage.

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