Mortgage Broker Company - Need A Special Mortgage? 4

What is a Bridge Loan?

Bridge loans also have the terminology swing loans. This loan is used when you are selling you home and need the proceeds from this sale to purchase your new home.

If your current home does not sell right away you can get a bridge loan which uses the home as collateral and allows you to close on your new home.

The bridge loan pays off the old mortgage and goes toward the down payment of the new home. When you have sold your home you pay off the bridge loan and continue paying off the mortgage of you new home.

The lender of your new home is the one who gives you the bridge loan, it is usally a one year term and may have a lot of prepaid interest, sometimes as much as six months?

If your home sells before then, you may receive some interest payments back, however, if it hasn’t sold you may be required to continue making interest only payments.

Sharon