A Bridge Loan is a Stepping Stone
A bridge loan is not a loan used to build a bridge but rather is used as a sort of ‘stepping stone’ loan for borrowers. Using real estate as collateral for a bridge loan, most bridge lenders lend on houses, commercial buildings, and land. Bridge financing comes not from a bank lender but rather from a non-bank source of financing. Particularly for those who need a quick financing solution, and don’t have the luxury of time, a bridge loan can close much quicker than a bank loan. Also for situations where a borrower may have bad credit, a vacant property, or issues with property occupancy, a bridge loan is a viable alternative to a bank loan. But why is this type of loan referred to as a ‘stepping stone?’
Unlike a bank loan, a bridge loan is a temporary loan that allows a borrower to get from point ‘A’ to point ‘B.’ Whether it be due to timing or for another reason, sometimes borrowers cannot qualify for a bank loan and will need an interim financing option. Bridge loans serve as a stepping stone to another form of financing such as a bank loan, or to the sale of the property being used as collateral for the loan. Sometimes a bridge loan can be a term as short as 30 days, or up to as long as 5 years. This depends on how long a borrower needs to get an exit on a bridge loan.
Many real estate investors are new to the concept of bridge financing. Up until the crisis of 2008, many borrowers only took out bank loans. There was never a need for a bridge loan because banks were readily lending on investment properties. These days, getting an approval on an investment property at the bank can be a long, arduous trial that usually results in no loan. For this reason, many real estate investors are having to seek out new forms of financing, and a bridge loan is a top choice.
If you are seeking out alternative financing, learn more about the approval process involved in obtaining a bridge loan. It’s as easy as 1, 2, 3. Take a look at our programs here.
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Question will your debt improve by hanvig one bill to pay instead of several??? You are better off calling the credit card companies to ask their help in reducing your interest rates and making a conscious effort to pay the debt you have rather than focusing on consolidation. Please don’t consider one of those debt settlement places. They ruin your credit so badly that you may as well go bankrupt and owe nothing. What’s the difference between 7 years and 10 years of horrible credit that affect your interest rates, housing options, insurance rating and mainly your reputation??? You should consider a plan to pay what you owe and do it wisely. As you pay bills, take the same amount and apply to the next bill, then to the next bill, etc. Having one bill won’t get you any further ahead than hanvig several you owe what you owe. Get to the library and check out Dave Ramsey’s books on how to make a sensible plan. Reduce current expenses and increase income any way you can to get out of debt. You didn’t get into debt overnight so there’s no overnight solution except common sense and a diligent attempt to do what’s right. You CAN do it but not by hanvig everything you want. Start a savings account for long term needs and shop by value instead of cost. Look at both simple and complex debts. Consider downsizing home, car, wardrobe needs, etc. There were no credit cards 30 years ago and yet people had more. You can live without cable, cell phone, dinners at McDonalds, etc. Don’t try to keep up with the Joneses they’re broke!!! Worry about needs before wants and you’ll be amazed that you don’t need a loan you need a plan.
Thanks for your comment. I agree, stay away from debt settlement companies.