Definition of a bridge loan

By
Real Estate Agent with Harrington ERA,DE Homes For Sale, $$ Save $$ Buy Today !

For your benefit I have a local lender for her input about how a bridge loan may help you the consumer when buying a home here in Delaware.   If you don't know what a bridge loan is or have thought about using one please finish reading:

Here is her response:

Hi Tom.

 

Here's an example of when a bridge loan would be used:

"A consumer is purchasing a new residence and plans to make a down payment with the proceeds from the sale of a currently owned home. The currently owned home will not close until after the close of the new residence. A bridge loan allows the buyer to take equity out of the current home and use it as down payment on the new residence, with the expectation that the current home will close within a short time frame and the bridge loan will be repaid."

 

However, most banks don't offer bridge loans anymore as they pose more of a risk.

 

Thank you for your questions!

 

Andrea

 

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