WHAT IS A BRIDGE LOAN?
A bridge loan is a unique, short-term loan solution that provides the financing you need to transition through one phase of homebuying to another. Typically, borrowers use a bridge loan if they are in need of funds to either purchase their new home before their current home sells, or to fund the construction for the new home they are building. A bridge loan uses the equity in the current home as collateral for the new home.
HOW IT WORKS
With a bridge loan, the equity in your current home is used as a down payment (collateral) for the new home you are buying or building. Once you have aquired your loan, you will have the option to make interest only payments for up to 12 months, or until you close on your new home. At this point, the bridge loan is refinanced and converted into a permanent mortgage for your new home.
Because the loan term is 12 months, we do not offer escrow for taxes and insurance on bridge loans. We are happy to set up an escrow account when you refinance your new home. In the meantime, insurance and taxes will need to be paid when they are due.