A bridge loan is a short-term loan designed to provide borrowers with the means to access the equity in their current residence, and use that equity as a down payment and cover closing costs for the purchase of a new home. It acts as a financial bridge, allowing individuals to smoothly transition from their current property to a new one without the need to wait for the sale of their existing home to be finalized. Here are some key features and considerations for Bridge loans:
- Contract Duration: Typically 25 to 30 days from offer acceptance to closing.
- Credit Score Requirements: 680 Minimum credit score.
- Down Payment: Not required.
- Term Lengths: Bridge loans are typically for a 6-month period. At the end of your term. you can extend for an additional 6 month for an extra cost.
- Fees: Bridge loans require additional fees that will be paid for by the sale of your home.
- LTV: Bridge loans combined with your current mortgage can cover up to 85% of your home value.
- Payment: Bridge loans are typically short-term in nature, with an Interest only repayment plan for the life of the loan.
- Compensation: Both lender and Borrower paid compensation.