Whether you are a home buyer or a real estate investor, you can take advantage of a bridge loan for a very useful purpose. This type of loan allows you to cover temporary financing needed for buying a residential or commercial property. Whether you want to sell, buy or construct, this short-term loan proves very useful. Once you can secure permanent financing then you can clear this loan. There are many reasons why bridge loans have become so popular among buyers and sellers of properties.
All Types of Properties Are Covered
You can borrow a bridge loan for residential or commercial property. When you are buying a new house while you are yet to sell your old home then you may be out of cash to buy the new house. The required fund to buy the new house can come from a bridge loan. This type of funding is also suitable for commercial property buyers and sellers. Homes facing foreclosure are profitable real estate investment but such properties are sold only to buyers who are ready to pay cash immediately. A bridge loan can make a difference in buying or losing such a property. Bridge loans can also be used for properties under construction. The project can be started and completed on time with the help of this loan. Even projects under renovation can benefit from a bridge loan. Businesses undergoing partnership transitions or financial distress are another set of beneficiaries that can benefit from it.
Poor Credit Rating Is Not a Problem
Individuals and businesses facing poor credit rating find it very difficult to borrow a traditional loan. However, poor credit rating is not a problem when it comes to bridge loans. If the lender is convinced of the genuineness of the project and sure of its completion then no impediment is placed in lending this fund. The loan is cleared quickly as soon as the project verification process is complete.
Easy and Quick Approval
Unlike traditional loans that can take weeks or months before the approval comes through, the bridge loan does not take more than 1-2 weeks. In fact, under some circumstances, money borrowed this way becomes available within 24 hours of loan application. Borrowers who do not qualify for such special circumstances can still receive loan fund within two weeks.
Bridge loans do not require the borrowers to comply with strict borrowing rules applicable with most traditional loans. The borrower is free to use the loan fund as required. There are very few restrictions and that is why this type of funding has become so popular among borrowers looking for temporary fund to finance their real estate projects.
It is the flexibility and advantages over traditional loans that have made bridge loans a preferred choice of people dealing in properties.