3 Reasons Why A Bridge Loan Might Be Right For You
If you are in the housing market, it is likely you have heard about bridge loans. Often used in real estate, bridge loans provide funding during a transitional period and are typically replaced with more permanent bank financing once the investment is stabilized.
Here are some reasons why a bridge loan might be just right for you:
1. Flipping a Home
Flipper houses are properties bought by real estate investors (also referred to as “flippers”) in their original condition at a relatively low price. They then proceed to renovate the premises and sell them to a new buyer at a higher price than they paid for it.
Because these properties often need major repairs, lenders see them as risky propositions and often deny the investor’s financing requests. This is when bridge loans come into play.
Because they are short-term loans used until permanent financing can be secured, bridge loans are usually quick to obtain and give you some extra time to secure money for a mortgage.
2. Land or Existing Structure Acquisition
You are thinking of relocating and have found the property of your dreams, but you haven’t had a chance to sell your current residence yet. Bridge financing can promptly provide the necessary funds to secure your new home or buildable land while you find a buyer.
There are mainly two options available when considering a bridge loan:
- The bridge loan can be used as a second mortgage and put toward the downpayment on the new property until the current residence is sold.
- You can take out a large loan to pay off the mortgage of your old home and put the remaining money toward the downpayment of the new property.
3. New Construction
Bridge loans are not unique to real estate investments; they are sometimes used to help finance large construction projects. When beginning a new construction project, funds can easily become insufficient; bridge loans can help provide extra capital quickly.
Bridge Lenders In Your Area
At Mansby Capital, managing your bridge loans for land acquisition, new construction and rehabs is our specialty. We consider any project within the United States.
If you are looking for an approachable and fast bridge loan lender, contact us today!