INTERIM/BRIDGE FINANCING

Are you finding that possession dates aren't aligning as you transition between properties?

No worries! We offer flexible bridge loan options to bridge this gap seamlessly.

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Bridge financing serves the crucial purpose of bridging the time lag between the sale and possession dates of two properties. While not every lender provides bridge financing, MMG Mortgages can guide you through available options and the subsequent steps. Banks typically levy a basic administration setup fee and charge daily interest on bridged funds (e.g., the down payment amount, less the deposit).

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Here's what you need to know about bridge financing:

• Real Estate Transactions: Bridge financing is commonly utilized in real estate, especially when homeowners wish to purchase a new property before selling their current one. This is particularly advantageous in competitive housing markets where securing a new home takes precedence.

• Short-Term Nature: Bridge loans are usually short-term, ranging from a few weeks to a few months. Borrowers aim to repay the loan once their existing property is sold or they secure permanent financing.

• Higher Interest Rates: Bridge loans often carry higher interest rates compared to traditional mortgages or loans. This is because they entail greater risk due to the uncertainty surrounding the timing of the sale of the existing property or the acquisition of permanent financing.

• Loan Amount: Bridge financing amounts typically hinge on the equity in the existing property. Lenders may offer up to a certain percentage of the appraised value of the current property or include a contingency amount in the equity position.

• Property as Collateral: Similar to mortgages, bridge loans are secured by the property being sold. In the event that the borrower fails to repay the bridge loan as agreed, the lender reserves the right to foreclose on the property.

• Approval Process: Bridge loans often undergo a faster approval process than traditional mortgages, making them suitable for situations where time is of the essence. Nevertheless, borrowers must still meet specific eligibility criteria and furnish requisite documentation.

• Funds Utilization: Bridge financing proceeds can be allocated for various purposes beyond property acquisition. They can be utilized for renovations, debt consolidation, or other immediate financial needs.