| What is a "bridge loan?" Certainly, it
| |
| | under a bridging loan quickly. .
|
| is not a loan for buying a bridge. It
| |
| | However, you must realize that a bridge
|
| gets its name from a frequently used type
| |
| | loan has serious risks. It is still
|
| of financial strategy. Properly used, it
| |
| | something that will need to make sense
|
| can be a decided help in achieving
| |
| | for your business.
|
| financial goals. Improperly used, it can
| |
| | If you feel taking on this type of loan
|
| be a financial disaster.
| |
| | is the right thing to do, you will be far
|
| By definition, a "bridge loan" is a
| |
| | better off going through a specialist
|
| short-term loan used to purchase
| |
| | commercial lender. This lending
|
| commercial property. This is something
| |
| | institution will shorten the entire
|
| that can come in very handy, depending on
| |
| | process. A lending specialist will know
|
| the particular situation. There are two
| |
| | the market and he/she can quickly make a
|
| main points that you need to consider
| |
| | judgment on the best loan for you, based
|
| before you opt for a bridge loan. One is
| |
| | on your particular circumstances. It
|
| your needs and the other is the state of
| |
| | would do you no good at all if you have
|
| the property market.
| |
| | worked out a bridge loan package only to
|
| One of the major benefits of bridge loans
| |
| | find out the loan underwriters have
|
| is that it will allow you to purchase a
| |
| | rejected the application.
|
| new property before you have sold your
| |
| | Be sure to check that the loan can be
|
| existing one. You will need to evaluate
| |
| | converted into a conventional commercial
|
| your current situation to determine if
| |
| | finance package. You will also want to
|
| your needs justify taking on this type of
| |
| | check on the type of interest rate and
|
| finance. Some major questions you must
| |
| | the costs you will entail if you do have
|
| field in your evaluation are:
| |
| | to convert.
|
| Will you lose the new property if you
| |
| | Most commercial lenders will be willing
|
| can't offer a deposit?
| |
| | to extend the terms of your bridging
|
| Would you be eligible for a discount on
| |
| | finance package. If you have a buyer and
|
| the purchase price if you can come up
| |
| | you are waiting for the sale to close, a
|
| with the cash fast?
| |
| | bridge loan is much more flexible and
|
| What are the existing market conditions
| |
| | accommodating than you might expect.
|
| in regard to the sale of your existing
| |
| | Repaying your bridge loan at the end of
|
| property?
| |
| | the loan term more often than not depends
|
| Would it be possible to sell your
| |
| | on your ability to sell your existing
|
| existing property in the time frame set
| |
| | property. If your property does not sell
|
| out in your finance package?
| |
| | in the required time frame, you will be
|
| Most bridge loans typically run for one
| |
| | paying the existing loan on your current
|
| year and will need to be paid in full at
| |
| | property, your new property and the newly
|
| the end of the term unless it is possible
| |
| | converted bridge loan as well.
|
| to convert it into a commercial loan.
| |
| | If you believe this may be a possibility,
|
| Also, interest rates will be higher on a
| |
| | be sure to take a package that can be
|
| bridging finance package.
| |
| | converted to a commercial loan if the
|
| If you do not have an urgent need for the
| |
| | need arises. Otherwise, you may have to
|
| new property and the market is slow, it
| |
| | come up with the full loan sum at the end
|
| may not be in the best interest of your
| |
| | of the finance term. As I cited earlier,
|
| business to take on this type of loan.
| |
| | bridge loans can be a decided help for
|
| On the other hand if the property market
| |
| | your business, but there are risks. Let
|
| conditions are good, you can get out from
| |
| | the borrower beware !
|
