In general speaking bridge loan is the short-term loan which is used for fast cash extract until the permanent financing could be achieved. A bridge loan lender offers lending to the borrower to bridge the financial gap of one transaction to another. This type of loan help take a good care of your short term needs and also try to solve the long-term financial problems. Bridge loans are gradually growing its popularity between the borrowers and often uses to buy foreclosure or commercial real estate, enables the borrowers to close on a property more quickly.
Most of the time bridge loan borrowers don’t utilize the lending until the situations occur and which are given below:
- When the property is sold
- When a property is completed or improved
- When a property could be refinance
- Any changes in financial situations or credit improve.
- Any change in the business which would allow permanent financial options.
Bridge loans are often known as “Swing Loan”, “Gap Financing” or “Interim Financing” because most of the time this type of loan takes very less paper work than a long-term loan. At the same time, it could also allow you to make an ambitious offer on a property without any possible clause. It is not at all important either you need a temporary lending or fast lending, a bridge is always useful and a perfect financial solution.
- This loan is specially designed to provide easy and fast loan in the time of financial crisis.
- This loan needs less paper works.
- It gives an extra time while waiting on a specific situation or conditions.
- This loan also provides suitable means for the seller to buy a fresh property before selling the present property.
- Interest rates on bridge loan is quite very high than a traditional long-term loan
- It also not designed for long-term loans.