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What is a Bridge Loan?


Often, many people have low liquidity when changing homes. At this time of negotiation, while selling a former property and buying a new one, alternatives arise. The “bridge loan�

consists of short-term financing that is guaranteed by a future income. In a real estate transaction, this type of financial product is useful to acquire a new property when homeowners have no time necessary to sell a home in optimal conditions.

The bridge loan mechanism works differently than a conventional mortgage. In the case of a house purchase, it is designed to help the owner to buy a new home while selling the previous one. In general, a bridge loan requires two properties as

guarantee (the house on sale and the new one). The bank will establish a short term to pay that loan.

When The Owner Concludes the Sell

As long as the owner does not find a buyer, he must pay the credit installments. When the sale of the previous house concludes, the owner can use the

money to cancel part of the debt and release the old house. At that time, they can opt for a conventional mortgage for the new property.

Risks One of the risks of the bridge loan is not to sell the home in a fixed period. In this case, the debtor will face a big problem. However, a bridge loan can be beneficial if the owner makes the right decisions knowing the real

estate market. The bridge loan can provide greater convenience because it allows us to finance the purchase of a new property without having sold the previous one yet.

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Although the “bridge loan� is not usually offered by financial institutions, it is accessible for some clients. This loan is intended for people who support the acquisition of a home, assuming the risk of possible price rises or changes in market conditions.

Call The Professionals For further information, call the professionals on commercial real estate in Charlotte NC.


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What is a Bridge Loan? | Commercial Real Estate | Charlotte NC Commercial Real Estate Charlotte NC

What is a Bridge Loan? | Commercial Real Estate | Charlotte NC Commercial Real Estate Charlotte NC

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