Who Should Apply for Bridge Loans?

Bridge loans are short term loans that help individuals finance additional monies they may need to close a loan. Borrowers may use bridge loans to complete a particular task on a property; such as renovating, selling, or receiving a more permanent or larger financial aid package.

Ideal Bridge Loan Scenarios

Bridge loans are popular because they allow borrowers to act and receive funds quickly. Here are ideal scenarios for bridge loans.

  • Home owners who recently purchased a new home, but have an existing home still up for sale, may want to consider a bridge loan. In this case, a bridge loan would give them the extra cash flow needed to help cover both mortgages until the original home sells.
  • For home owners who want to quickly buy, renovate, and sell property (i.e. flip a home), a bridge loan is a great option. Since bridge loans offer short terms and generally no prepayment penalty, they let individuals quickly purchase, improve, and sell the property to get an immediate return on investment.
  • Home buyers or commercial property owners who want or need to quickly close on a property can use a bridge loan to help fund the purchase.
  • Bridge loans allow commercial property owners the funds necessary to purchase large properties and then operate the business long enough to qualify for longer term, lower interest financing.

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