Bridge Financing - Underwriting Fundamentals 101
Bridge Financing
Today we're going to be talking about bridge financing.
So bridge financing is when somebody sells a home and the closing date is usually after when they're purchasing.
So they need a bridge to get their equity from their old home, even though it's not officially sold.
And then they put that to the new home as a down payment. So not all lenders offer the bridge financing.
So that's super important for you to know because if you need to do this you have to make sure your mortgage agent matches you up with the correct lender and then some the lenders that do do it, some have no setup fee. Some have a setup fee.
The interest rate between them is pretty similar and it's done as like an open mortgage.
Remember, you do pay interest on that money, but it's for such a short term that usually it's not, you know, sufficient.
So the average bridge loan can maybe cost a thousand, maybe 2000, depending on the interest and the set up for you that the lender charges.
But again, if you are very sensitive and and fee sensitive, let your agent know that so they can find the lenders that offer bridge loans and financing at the best rates with the lowest fees.
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