BRIDGE FINANCING

Know the difference - Bridge Financing

Bridge financing is a loosely used term within the real estate industry but had a very specific meaning within the banking industry.

Bridge financing is where a vendor has sold their property and purchased a different property but they are unable to get the completion dates to align.  They must complete on the purchase prior to the closing of the sale of the property.   They are "bridging" the net proceed of the sale which is providing the down payment on the purchase. They only have to qualify for the new purchase not the bridging amount.

If the vendor has not sold their property then this is considered a refinance.  In other words they must re-mortgage their existing property to get the down payment for the proposed property.  In this case the client must qualify to financially carry both properties using the assumption that one of the properties will be a rental.


~MICASA MORTGAGE CORPORATION