BRIDGE FINANCING

What is bridge financing?  Bridge Financing is arranging an interim loan with your lending institution, to “abridge”, to have the money needed a few days in advance of the sale of your home, to close on your purchase by way of a loan from the bank. 

By bridge financing, you eliminate the stress of waiting for the sale of your home to close on the same day as your purchase, in order to have the money to close on your purchase.

Bridge financing gives you the luxury to close on your purchase, and a few days later you close on your sale.   When your sale takes place, you then pay back the bank the bridge financing loan from the sale proceeds.   

The cost of bridge financing is not as absorbent as may be anticipated, and may be well worth eliminating the anxiety of closing both deals on the same day. 

There will be an interest charge on the monies borrowed, and with today’s interest rates, may be well worth the while bridging.   Be sure to enquire if there would be an administration fee.  This would be dependant on your lender. 

It is always good idea to deal with the same lending institution that you are using if you are arranging a new mortgage on your purchase, or the bank that you typically use with your daily banking.   By using the same bank, they already have all your income verification, debt to income ratio and any other information needed for you to qualify.

Selling and buying can be a stressful time, why not take advantage of mechanisms to make the experience more enjoyable.