Mortgage Bridge Loans to the Rescue



For instance, an individual might be ready to move to a bigger house, but is confronted by the finance problem. How do you space the gap between paying off your current mortgage, coming up with a down payment for the new house, and securing the mortgage on that house as well? Obviously, you must take advantage of some financial instrument to help you transition from the old mortgage to the new mortgage. A mortgage bridge loan provides the answer to your problem.



Many businesses face a similar problem. They are in desperate need of temporary or short term financing so they can sell their commercial properties or transition smoothly into a refinancing solution. Again, their problem is one of time. They need a quick, yet short term answer to their financial concerns, and a mortgage bridge loan provides just that.



Its like Crossing a River



Have you ever had to cross a bridge to get from point A to point B? Normally, a bridge is erected to help us get through the terrain we might not otherwise be able to navigate by ourselves. Most of us can’t drive across rivers, bays, or lakes. We need assistance to do so, and a physical bridge allows us to reach our destination. A mortgage bridge loan works in much the same way. In this case however, the bridge that is built serves as a financial bridge, allowing us the flexibility we need to get from one point in time to another point in time. In this sense then, a financial bridge spaces time, not water.



Now that we have a better understanding of what a mortgage bridge loan is, let’s examine a couple of scenarios where a mortgage bridge loan might prove beneficial.



Personal Mortgage Bridge Loan Scenario



Suppose you are buying a new house and to move into your new house you must first sell your old house. Essentially, to make the move you must perform two separate transactions. First, you must sell your current home. Second, you must close on your new home. Ideally, you can complete these two transactions smoothly with little or no problems. However, unless you have a respectable amount of savings or a high positive cash flow, you will likely need some extra cash to put down on your new home as you wait to close on your old home.