Definitions for "Bridge Loans"
An interim or short-term loan used between long-term financing, or prior to the obtaining of a usually larger debt or equity financing. Such bridge loans tend to be ‘hard money’ loans with high interest rates.
It is a sensible loan option when you are buying and selling; generally used to pay for the new home while the deal for your old home is still in pipeline.
When a home buyer has purchased a new home before his/her current residence has sold, he/she may not have sufficient cash to complete the new home purchase. A few lenders offer bridge loans to enable the borrower to complete the purchase and close the loan on the new property. Bridge loans are short term loans to be paid off when the first property sells.
Used to bridge the gap between the initial construction and the first advances available under the terms of the construction mortgage.