A Bridge loans allow home buyers to take out a loan against their current home to buy a new home. This helps the home buyer to get a new house before their current home is sold.
When used for real estate, a bridge loan requires a borrower to pledge their current home as an asset for collateral to secure the debt. The borrower must have at least 20% equity in the home being pledged.
Bridge loans are suitable for those people who have to move out from one state to another per their job requirement and they don’t have ample time to sell their house and get new home in the new place. Bridge Loan allows a home buyer ample time to sell the old house and use it to pay off the new house upon sale.
Bridge loans also tend to have higher interest rate and typically last between six months to one year. Therefore bridge loans are best for borrowers who expect their current home to sell quickly. Apply today for a Bridge Loan!