Many people find themselves desiring to buy a property but are short on the needed cash. A bridge loan may be the best option for them.
Bridge Loans Explained
Bridge loans are a common type of financing used by real estate investors. These are short-term loans designed specifically for the real estate market, typically with terms of up to three years. They are designed to be extremely adaptable and provide quick funding and are ideal for a crowded real estate market in which properties can move quickly.
The inherent flexibility of bridge loans is one of their primary advantages. The most common use for them is to speed up the closing of a property purchase. They can also be used to pay for a host of other expenses related to property purchases.
In a fast-moving real estate market, quick-funding bridge loans are superior to conventional loans. Traditional bank loan applications typically can be tedious and can take a long time. There is usually a prolonged waiting period for approval after the application is completed. In some cases, the applicant may be denied the needed loan.
Using Bridge Loans: Typical Scenarios
Bridge loans are generally used when a prospective buyer has not yet sold an already-owned property. Here are a few examples:
- An individual just lands a great job in a new city. He sees a house in the new city that he wants to buy but can’t sell his existing home in time to provide the cash needed.
- A business finds a commercial property that just came to market that it wants but has very little cash on hand to seal the deal. It takes out bridge loans and purchases the property within a few days.
Contact Speed Funding for More Information
Speed Funding is a lending company that knows bridge loans inside out. They can answer any additional questions you may have or get the short application process started immediately. If other funding mechanisms seem a better fit for you, they will suggest these options as well.