What is a Bridge Loan?
Bridge loans serve as a form of short-term financing (less than one year) meant to be used until the person or company secures a permanent loan elsewhere. They are ideal when the borrower is in need of immediate cash flow but plans on shifting to long-term financing in the near future. At Western Highland Mortgage, we categorize Bridge Loans into the following three types:
Residential Purchase: When the borrower lives in their existing primary residence and finds a new house to move into. In this case, we will quickly provide a Bridge Loan to secure the new house and sell the old house. The borrower has 11 months to convert the loan to a conventional mortgage, giving her the opportunity to buy her dream house before it flies off the market.
Residential Construction: Unlike the above scenario, this one accounts for people who plan to build their own dream house. The Bridge Loan in this case allows the borrower to obtain enough financing to build their new primary residence before moving out of their old one. Once construction is finished, they can sell the old house and convert the loan back to conventional.
Business Purpose: We can supply abridge loan for business purposes if the borrower has a large amount of equity in their current primary residence and wishes to improve their business. In this case, we can secure the primary residence, as long as the borrower can prove the loan will go towards the business.
In all of these cases, Western Highland Mortgage is happy to provide a Bridge Loan at 65% Loan-to-Value for up to 11 months. Please Contact Us today to see if your project fits our formula!