First, they are not used to buy a bridge.
Bridge loans are short term loans that bridge a gap to long term financing or for another property to sell.
These loans are use to fill a need for a short term capital. The bridge loan is always secured and will be paid out typically in less than a few months.
Bridge loans may be used to purchase a property while waiting on another property to close. Once the property sells the bridge loan would be paid off.
The loan works perfect when a bank is dragging its feet to close a loan and needs another 30 to 60 days for their processing.
As long as there is a property with good equity available it can be used as the collateral for the bridge loan.
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