Bridge Loan | Mortgage Weekly | Nov 17th, 2017 | Jason Roy | Edmonton Mortgage Broker

Mortgage Weekly time Another crisp winter day here so Bridge Financing what is bridge financing and where does it come into play and how do you get it

Bridge financing is when you sell your house and you're buying a new house and the possession dates don't work out and you need some money to cover the down payment for the new house so you've bought a new house and your possession date let's say is January 1st but you've sold your house but their closing date on that one isn't in terrible February 1st so you've got a month in there where you need to be in the new house sooner then you sold the old house so you need some money to cover the down payment so that you can get the new mortgage on a new place so that's bridge financing so it covers that down payment that then gets paid back once your house current house sells so how do you get it obviously you need to have an accepted offer on your new house that you're purchasing and have your mortgage approved and all that good stuff and then you need to have an unconditional sales contract on your current house so you can't just be listed for sale can't have an offer on it that offer needs to be accepted and the new buyers need to have removed all their conditions so that they're 100% committed to buying the house and then we can apply with the lender for a bridge loan so that allows the lender to see ok you're closing the new purchase on January 1st and your sales closing on February 1st we can see how much your house has sold for and then you've got X amount of dollars coming to you and in equity there that can cover the down payment and then they can grant you that bridge loan that loan gets facilitated through your lawyer so you don't actually see the funds but it gets facilitated through the lawyer they register the loan against your new house and your old house and then the lawyer pays out once it sells so there's some fees that a set up fee paying the lender a couple hundred bucks and then you pay a daily interest on the funds that are borrowed just the key part being that you're boring just the down payment not the full mortgage amount obviously you got the full the rest of the mortgage amount but it's that down came at the twenty thousand 50 thousand whatever it is that that you're putting down that's the bridge loan that's what you're borrowing so the key is getting that accept that offer on your current house without that you can't apply for the bridge loan because there's no way of the lender knowing when your homes gonna sell when that loan is gonna be paid out so they won't do it until you have a accepted offer on your current home so I know if you get in that situation let me know happy to help figure it out and you need anything else you know where to reach me all right have a good weekend ciao

Source: Youtube

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