An interim or short-term loan used between long-term financing, or prior to the obtaining of a usually larger debt or equity financing. Such bridge loans tend to be ‘hard money’ loans with high interest rates.
It is a sensible loan option when you are buying and selling; generally used to pay for the new home while the deal for your old home is still in pipeline.
When a home buyer has purchased a new home before his/her current residence has sold, he/she may not have sufficient cash to complete the new home purchase. A few lenders offer bridge loans to enable the borrower to complete the purchase and close the loan on the new property. Bridge loans are short term loans to be paid off when the first property sells.
Simply stated, a mortgage placed against a home for a short period. From their creation everybody understands that this Mortgage is for a short time, usually due when a home is sold or somebody cashes in their stock options. Loans of this type offer a way for people to buy one home before selling their current home. The Bank understands that you are not able to make two monthly payments forever, but they make allowances for a short term to help people buy homes or when there is a job transfer involved.
Bridge loans are short-term financing agreements that fund a company's operations until it can arrange more comprehensive longer-term financing. The need for a bridge loan arises when a company runs out of cash before it can obtain more capital investment through long-term debt or equity.
Bridge loans are loans that provide short-term financing for tuition payments, books etc, while the student is waiting to receive their college financial aid. To obtain a bridge loan, contact the financial aid office at your college.