BRIDGE LOANS:
Bridge Loan is a type of short-term loan, tytically taken out for a period for 1 year pending the arrangement of larger or longer-term financing. It is also known as a "Swing Loan". A Bridge Loan is interim financing for a individual or business until permanent financing is obtained. Money from new financing is used to "take out" the Bridge Loan as well as other capitalization needs.
Bridge Loans are typically more expensive than conventional financing, to compensate for the additional risk. Bridge loans usually have a higher interest rate, points (points are essential fees) and other cost that are amortized over a shorter period, and various fees and other cost. the lender also may require cross-collateralize and a lower loan to value ration. The Loan to Value that NW ANGEL FUNDING LLC uses is 65% or less on the value of the property. On the other hand they are typically arranged quickly with relatively little documentation.
Use of a bridge loan is becoming and more frequent more and more frequent today's world of residential lending. The term "Bridge Loan"
to a particular type of secondary loan to use as a short term loan. These types of loans are temporary in nature, and intended to cover the gap created when a the property in question may not be eligible with conventional lending the the Bridge Loan is to provide the funds so that the borrower can finish their project.
Bridge Loans are secured by the property equity until paid off by the conventional loan.
Bridge Loans are typically more expensive than conventional financing, to compensate for the additional risk. Bridge loans usually have a higher interest rate, points (points are essential fees) and other cost that are amortized over a shorter period, and various fees and other cost. the lender also may require cross-collateralize and a lower loan to value ration. The Loan to Value that NW ANGEL FUNDING LLC uses is 65% or less on the value of the property. On the other hand they are typically arranged quickly with relatively little documentation.
Use of a bridge loan is becoming and more frequent more and more frequent today's world of residential lending. The term "Bridge Loan"
to a particular type of secondary loan to use as a short term loan. These types of loans are temporary in nature, and intended to cover the gap created when a the property in question may not be eligible with conventional lending the the Bridge Loan is to provide the funds so that the borrower can finish their project.
Bridge Loans are secured by the property equity until paid off by the conventional loan.
THE WORKINGS OF BRIDGE LOANS:
From the lender's perspective, there are not many set requirements in order to approve a bridge loan. A financing company will usually not rely solely on income and credit score. Rather, most lenders will consider approving such as a loan if it seem like a workable solution to the clients dilemma.
