Buying a home is an exciting time! The prospect of a new place to live for you and your family is a major event. Purchasing real estate can also cause people anxiety, as things don’t always go as planned, and you can’t control all the moving pieces.
For example, sometimes, your dream home comes on the market. The location is right, the house’s structure and the finishes are perfect, and it’s all within budget. However, you haven’t closed the deal on your existing home.
What do you do? Let’s delve a little deeper into the topic to learn more about how you can apply for Burke Financial bridge loans, the steps to and more.
What is a Bridge Loan?
“Bridge loans,” also commonly called “bridge financing,” refers to the temporary loaned funds secured by your existing home. Imagine a bridge connecting your old home’s financing to your new home, and the image becomes clear!
Someone caught between homes is in a very different position than someone without any equity, and they shouldn’t be treated the same. Bridge loans recognize and address this unique, temporary position.
The equity you get from bridge financing helps to launch you onto the next stage of your homeownership journey.
Who is Eligible to Receive Bridge Loans?
Any homeowner stuck between two properties can apply for a bridge loan. You need a firm sale agreement in place on your existing home, however.
As anybody in a hot real estate market can attest, sometimes, perhaps too often, there are bidding wars requiring would-be buyers to respond quickly. We’ve all heard of those listings deliberately set too low to attract multiple bidders, who then drive up the price among each other, perhaps higher than what the original listing would have been were it set by the owner.
Having access to the right financing lets you respond quickly enough when the market requires immediate action. Nabbing the right home can be difficult, even when markets are cooling. Securing the funding for one house is difficult enough, let alone two!
Because the situation requiring bridge financing is usually brief, bridge loans are usually three to six months in length, but some can extend to one year or more. Ideally, your current home closes as soon as possible, and the bridge loan is no longer necessary.
Bridge loans provide an option for all contingencies, so homeowners can always leverage existing equity to cover themselves while the planned-for deal finally closes.
What Happens After the Bridge Deal?
Once you manage to sell your existing home, you can take the proceeds and pay off the bridge loan and any accrued interest. To maximize your access to cash and minimize the amount you’ll need to pay off, speak to Burke Financial for bridge loan solutions that work best for you.
All homeowners are unique, and so are their financial situation and life goals. Burke Financial connects you to our broad network of bridge loan providers, who we know have delivered high-quality services for years.
We work with people of all levels of credit, income, and debt to find solutions that help them secure their homes. People worry about getting a loan with bad credit when the cost of housing is so high — Burke Financial has your back.
Our clients get the benefit of our entire team of licensed mortgage professionals, not just one agent.
Your property is where your family lives, but it’s also a financial asset people depend on to retire comfortably and help set up the next generation. Buying a home always comes with stress, and navigating the period between properties only brings on more pressure.
If you’re still curious about how it all works, have your questions answered by reading this FAQ or call Burke Financial at 1-877-709-0709.
What’s Great About a Bridge Loan?
Bridge loans let homebuyers purchase a home before selling the one they already own. Even if you had sufficient capital to do this on your own, the loan gives you additional peace of mind.
Leveraging the equity in your first home to pay for the second one makes sense. You may need a bridge loan to give you the time to make upgrades or renovations in the second home, whether it’s a fixer-upper or you’re doing a cosmetic overhaul.
What Are the Risks?
Any loan you take on comes with potential risks. In the case of a bridge loan, interest may be more expensive than conventional financing.
The costs can vary widely depending on the conditions and terms. Taking on a new loan that typically has a higher rate without guaranteeing that your first home will sell during the term can be risky.
Burke Financial will help ensure the rates and risks are as low as possible by guiding you through the different types of loans in Canada so you make an informed choice that suits your budget and lifestyle.
A bridge loan isn’t the first type of financing homeowners look for. Rather, it’s a convenient source of funds for people in a bind.
Why Burke Financial?
Burke Financial is connected to Canada’s largest network of mortgage broker partners, giving you access to the best resources and rates in the country. Beyond the numbers, we help our clients understand the intricacies of the bridge financing arrangements so they’re clear about the process and able to get the right deal for them.
Leading brokerages combine years of top-tier experience with dedicated, personalized services that go the extra mile. If you need money for a bridge loan, we’ll draw on our deep relationship with banks, credit unions, and private lenders to get you the best mortgage and bridge loan rates.
Our team delivers friendly, professional support that happily goes the extra mile for you.
Owning a home shouldn’t be a gruelling, stressful process or a burden that takes over your life. Yes, a lot is riding on the decisions you make, but you have committed, experienced professionals at your side when you have questions or need assistance with bridge loans or any other aspect of real estate financing.