Bridge Loans
The ideal loan for investors when money is still tied up in a previous investment while trying to purchase a new one. These loans allow investors to bridge the gap between the closing of one investment and the opening of another, before any deal has actually been finalized.
Intro to Bridge Loans
When investing, sometimes the next great opportunity comes before the last one is finished. When you don’t want to miss out, but don’t have the means to begin your next investment without the profit from the first, you come to us at Loan Vault. At Loan Vault, we know when one door opens, the first might not even be closed. We love helping investors find the best loans possible to bridge the gap between closing one endeavor and beginning the next. When you need help expediting your next investment while waiting for the last one to close, contact us to make sure you are getting the best rates and best availability for all your investment needs and successes.
What is an Bridge loan?
A bridge loan is a loan that allows you to borrow money for a new property while you wait for an older property to close. Often bridge loans are used for closing costs, and there is a year gap from receiving the loan to the start of payments on the loan. It is a good idea to have expectations of assets and when the first investment will close in order to properly structure paying off the bridge loan. Typically, a sizable amount of equity is required in the first home to qualify for a bridge loan.
These loans:
- Offer up to 3-year, interest only programs
- Have availability as a first or second mortgage
- Have no prepayment penalties
- Are often used for closing costs
Is a Bridge Loan Right For You?
Requirements to keep in mind when considering a Bridge Loan:
- 20% equity in initial home
- 3 months of mortgage reserve (ability to make 3 months of payments)
- Good to excellent credit