Bridge financing are temporary loans, secured by your existing home, that bridge the gap between the sales price of a new home and the home buyer’s new mortgage in the event the buyer’s existing home hasn’t yet sold before closing. In other words, you’re effectively borrowing your down payment on the new home. The benefits of a bridge loan are that:
A buyer can buy a new home and put the existing home on the market with no restrictions, might gain a few months free of payments, can still buy a new home even after removing the contingency to sell under certain circumstances.
Bridge loans are short-term solutions, typically six months in length, although they can be for as short a period as 90 days and extend up to 12 months or longer. To be eligible for a bridge loan, a firm sale agreement must be in place on your existing home. This method of financing is most commonly considered by homeowners in hot real estate markets (GTA) where bidding wars are the norm, and you need to make a quick decision to snag your dream home without worrying if your existing home has sold yet. When you do sell, you can use the proceeds to pay off the bridge loan and any accrued interest.
Burke Financial works with Canada’s largest mortgage broker networks which gives us access to the very best bridge loan services at the best rates available across Canada. If you’re planning to buy a new home and need access to funds as you await the sale of your current home, let our team of experts set you up with an extremely competitive bridge loan. We will find the best possible loan rate from our vast network of banks and credit unions.