Your Questions About Bridge Financing Answered
Matrix Mortgage Global – Your Questions About Bridge Financing Answered
Bridge financing is a solution for those who wish to purchase a new home before their old one has sold. It is a loan that is meant to “bridge” the time period between buying one home and selling another. Since many of our clients have questions about bridge financing, we have decided to answer some of the most common questions in this article.
Which lenders offer bridge loans?
It tends to be larger lenders including all the major banks that offer bridge financing. There are however some smaller lenders that can also offer it, so it is a good idea to discuss this with your mortgage broker so they can help find you the best rate.
How much bridge financing can I get and how long may I borrow it for?
Most lenders will not have a problem offering up to $200,000 in bridge financing for a period up to 120 days. If you require more money or a loan for a longer period of time, it is usually decided on a case by case basis. Larger bridge loans may require more legal work which can also make them more expensive.
How do lenders calculate bridge financing?
The calculation is based on the closing dates of both your sale and purchase. For example, if your closing date for your sale is in 90 days but your closing date for your purchase is in 35 days, then you will need bridge financing to cover equity over the next 55 days.
What other fees are involved?
Like other types of loans, you will be charged interest on a bridge loan. Additionally, you may be charged an administration fee and if a lien on your property is required, you will also need to hire a real estate lawyer.
What do I need to qualify for bridge financing?
To qualify for a bridge loan with one of the major banks, you will require both your Sale Agreement of your existing home and your Purchase Agreement for the home that you are buying. If you do not have a firm closing date for the sale of your current home, it is unlikely that you will be able to get bridge financing through a traditional lender, but you may still be able to get it through an alternative lender.
If you are interested in applying for bridge financing, call Matrix Mortgage Global today at 1-877-366-2961 and one of our mortgage agents will be happy to help you.