Bridge Financing
Discover the financial freedom that Freedom Capital can bring you!
Are you looking for Bridge Financing that can fund your needs?
- Weak credit score?
- Lack of funds?
- Looking for Quick and Easy Bridge Financing?
- Need more time to file Financials?
- Bank taking longer than usual to provide take-out financing?
- Need funds to start another project?
If these scenarios apply to your situation, Freedom Capital is here to help! With our custom mortgage solutions, our financial experts ensure the borrower gets the solution they need.
WHAT IS BRIDGE FINANCING?
WHAT MAKES US UNIQUE?
Instant Approvals
At Freedom Capital, we are committed to providing our clients with seamless approvals. Our expert team ensures you have easy application procedures and simple terms. With a Freedom Capital mortgage, you can get approved for your bridge loan in as little as 24 hours*!
Obtain Higher Loan to Value than the Banks
In today’s day and age, banks are unable to provide borrowers with the unique mortgage solutions they need. Their traditional loans and tedious approvals have driven borrowers to private financing. Freedom Capital’s ideal loan terms and unique mortgage solutions are what makes us a more attractive lender capable of meeting your requirements.
Common Sense Lending
At Freedom Capital, we prioritize our client’s needs. With a common-sense lending approach, we ensure every borrower obtains a mortgage that suits their needs. Whether it be a second mortgage, construction loans, land financing, or bridge loans in Canada, Freedom Capital is a one-stop-shop that can cater to all your needs.
Why Choose Freedom Capital for Bridge Financing?
- A high credit score
- Stable career
- A large down payment
- Clear mortgage documentation
- Low debt-to-income ratio
- Years of stable income
- And/or other documentation.
FAQs
Bridge financing can provide financial flexibility and save time, but it also has its downsides. Here are some pros and cons to consider:
Pros of bridge financing:
Financial flexibility: Bridge financing allows you to use the equity in your current home to help purchase your dream home before someone else buys it.
Time-saving: You don’t have to worry about the sale closing on your current home before you close on your new home.
Cons of bridge financing:
High interest rates: Although bridge loans are short-term, they typically have interest rates similar to open-rate mortgages, which can be higher than what you’re used to paying with your current mortgage.
Costly: If the sale of your current home falls through for any reason, you may have to pay two mortgages until a new sale is finalized.
Conventional lenders, such as banks and credit unions, and some mortgage banks may offer bridge loans if you have a good credit score and can demonstrate your ability to repay the loan. However, these lenders have strict requirements, and you’ll need to provide a copy of the Sale Agreement for your current home and the Purchase Agreement for your new home.
If you prefer an easier application process or have poor credit, you can consider using a “hard money lender,” such as private mortgage lenders or real estate investors. These lenders place more importance on the equity value of your current home than your credit score. However, hard money lenders typically charge higher interest rates and may not be suitable for longer-term bridge loans.
A bridge loan is a short-term loan designed to provide temporary financing until a more permanent source of financing is available. Typically, the repayment period for a bridge loan is anywhere from a few weeks to a maximum of 12 months. The repayment terms will vary depending on the lender and the terms of the loan agreement. It’s important to note that bridge loans often have higher interest rates than traditional loans due to the short-term nature of the loan and the increased risk for the lender.
Bridge loans are often used by homeowners who are looking to purchase a new home before selling their current home. This allows them to use the equity in their current home as collateral for the bridge loan and use the funds to make a down payment on the new home. Bridge loans can also be used to finance the purchase of a new property while waiting for the sale of an existing property, to pay for home renovations, or to pay off debt.
If you are unable to repay your bridge loan on time, you may be subject to late fees and additional interest charges. If you continue to be delinquent on your payments, the lender may take legal action to recover the loan amount. In some cases, the lender may be able to foreclose on your property if you default on the loan. It’s important to carefully consider your ability to repay the loan before taking out a bridge loan and to have a plan in place to ensure that you can make the required payments on time.
While both bridge financing and a mortgage involve using a property as collateral and require the borrower to qualify for the loan, they differ in terms of loan purpose, duration, and terms. A mortgage is typically a long-term loan used to finance the purchase of a home, with repayment terms ranging from 15 to 30 years. In contrast, bridge financing is a short-term loan that helps bridge the gap between the purchase of a new property and the sale of an existing one. Bridge loans usually have higher interest rates and shorter repayment terms, ranging from a few months to a year.
Some lenders, such as banks and credit unions, may not offer long-term bridging loans for house purchases in Canada. In such cases, borrowers may have to seek out private lenders who specialize in short-term financing. Private lenders may offer more flexible terms and criteria, but often charge higher interest rates and fees.
When you sell your original home, the proceeds of the sale are used to pay off the bridge loan. Ideally, the sale of your original home should occur within the short-term duration of the bridge loan, allowing you to avoid additional interest and fees. However, if the sale takes longer than expected, you may need to negotiate an extension or consider refinancing options to avoid defaulting on the loan.
