Are you looking for a loan that doesn’t require mountains of paperwork and offers rapid approvals? Do you also need a loan for just a short period of time, while you wait to receive the funds for a property you’re selling? If these statements describe your situation, it sounds like a bridge loan may be the perfect solution. Residential bridge loan lenders know how to push approvals through as quickly as possible so you don’t miss out on a real estate deal you have your eyes on. Here’s a beginner’s guide to applying for a bridge loan.
How a Bridge Loan Works
If you’ve never received a bridge loan before, you’re probably wondering “how does a bridge loan work?” The answer is pretty simple. A bridge loan is a short-term loan (typically with terms up to a year) that can help you cover immediate costs (such as buying a home or property) while you wait for another property to sell or while you wait for long-term funding.
Bridge loans are very popular in the real estate industry because they provide funds very quickly. This is important when you’re trying to buy a home or property that’s listed for a great deal and you don’t want someone else to buy it before you have a chance to. In situations like this, traditional loans are too cumbersome and slow and could make it impossible for you to jump quickly on a great purchasing opportunity.
Benefits of Bridge Loans
In addition to their rapid approvals, bridge loans have a variety of other benefits that make them appealing for a specific group of borrowers. Here are some of the reasons why people in the real estate often choose bridge loans over other types:
- Large loan amounts
- Ability to close quickly on a property
- Income documentation not required
- Possible to receive even after a traditional loan denial
These are just some of the most notable benefits bridge loans can offer. However, they aren’t ideal for everyone or for every situation. It’s important to do your research to determine if a bridge loan is right for you.
How To Know if a Bridge Loan Is Right for You
If you’re confused about whether or not a bridge loan is the right choice for you, that’s OK. Private money mortgage lenders can help you understand if this type of product works well for your current financial situation or not. In the meantime, here are a few clues that may indicate a bridge loan is a good solution for your needs.
- You can’t afford a down payment on a new property you want to buy without selling your current home first
- You have your eyes on a new home but you know houses in the area sell quickly
- You want to purchase a new property but you can’t get the seller to accept your offer if it’s contingent on the sale of the home you currently own
These are all great indications that a bridge loan could work well for you. Contact residential bridge loan lenders near you to begin the application process.