The simplest way to define a bridge loan is as a short-term loan providing temporary financing until a permanent financing solution can be secured. These types of loans provide quick financing and they allow a prospective property owner to borrow against the equity in an existing property in order to finance the purchase of a new one. Upon purchasing the new property, the first property is sold and the bridge loan can then be paid.
A bridge loan is an option for real estate investors wishing to acquire a new investment property before selling an existing property as well as for homeowners that would like to move. These loans can be used for a broad array of properties including commercial, vacant land, industrial, and residential. Much like a typical hard money loan, bridge loans do not require as much time when it comes to application and approval when compared to a bank loan.
Interest rates on bridge loans will vary considerably based on a multitude of factors including but not limited to the length of the bridge loan, the type of property, and the loan to value ratio. These interest rates tend to be high and they often have higher costs of transaction. However, their flexibility to serve as a “bridge” make them a viable option.
This update is by Monroe Funding Corporation, a direct equity lender serving clients throughout Central and South Florida. We specialize in first mortgages on non-owner occupied residential and commercial property investments as well as real estate loan options. Our fast and flexible loan programs get you to the closing table quickly and professionally. For more information on hard money loans Miami, please call 954-816-0388 or fill out our hard money loan application.