Bridge Loan

A bridge loan is a mortgage loan that is used when a home buyer is still seeking permanent financing for the purchase. A bridge loan can be used by a buyer who has not yet sold his last home and needs a loan to pay the mortgage on both the old and new homes. This mortgage must be paid until the sale of the last home permits a permanent mortgage for the new home. Sometimes, it is used to prevent a home from being sold to another buyer before the first buyer can find a mortgage with agreeable terms. Normal closing costs generally apply to the bridge loan agreement. Bridge loans are generally meant as a short-term financing solution. These loans can be financed as an interest-only loan in some cases. Some come with down payments and others are unsecured. Another name for the bridge loan is the swing loan.