Bridge Financing

Posted by Joel Nash May 10, 2006

Bridge financing is used as a temporary source of funds to cover the cost of your new home if the sale of your current home isn't complete by the closing date. This is a plausible solution to assist Buyers getting the home they want without the ideal timing you normally require.

There are a couple of loan options, a lump-sum personal loan with a fixed interest rate, and a lump sum repayment at maturity, or a personal demand loan with interest-only payments.

The benefits of bridge financing are, there are no minimum or maximum loan amounts. The amounts depend on the confirmed source of repayment, such as the sale of your current home. You can make full or partial repayment at any time without penalty. Finally interest rates are comparative to conventional mortgage.

Remember don't count on bridge financing before consulting your local lending institution to ensure that this is a financing option prior to proceeding with any plans.