Finance Articles

Bridging Finance Basics

Bridging finance is a short-term loan that is used as a way to provide funding for the purchase of a new property while the borrower awaits the sale of an existing property. Unless all the stars are in perfect alignment, it's tricky to coordinate the sale of one property and the purchase of another property so that the transactions occur simultaneously.

Bridging finance or a "bridge loan" as it is more commonly referred to, makes such transactions possible. They keep the borrower from ending up in a dire financial situation as can happen when forced to pay two mortgages at the same time. Bridge loans can be used either for business or for personal reasons.

Primarily short term in nature, the process for obtaining a bridge loan is similar to that of most types of loans. Most importantly, it's advisable to work with a lender that has experience with this type of loan. Also, since the need for a bridge loan often arises with little advance notice, being pre-approved for such a loan is a good idea.

Bridge loans typically are structured as interest only loans meaning that the borrower pays only the interest on the loan each month. The borrower continues with this repayment plan until the property the loan is being used for is sold. When the sale finally does occur, the proceeds of that sale are used to repay the principal. The principal payment typically is in the form of a one-time, lump-sum payment.

The lender does not need to worry too much about default because the borrower is required to put up collateral to secure the loan. This can be in the form of another piece of property, business machinery or inventory on hand. But rest assured the lender will still thoroughly review the credit history of the applicant, the business and any partners or others with an ownership interest to assess the level of risk it is undertaking.

The interest rate assigned to the bridge loan is based on several factors: the anticipated risk associated with the bridge loan, the prevailing interest rates and a premium added by the lender. Since bridge loans are short-term, generally not longer than two years, the lender has only a short time to make money on the deal. The profit is derived from the interest rate.

Expect to pay a higher rate of interest for a bridge loan. And remember, the monthly payments on a bridge loan generally will be for interest only. Expect to pay off the bridge loan in full, usually as a one time balloon payment, as soon as the property is sold.

In the event that the property is not sold before the bridge loan matures, it can usually be converted to a conventional loan without paying a penalty. But it's always a good idea to double check this before assuming.

Need to source the best Bridging Finance available quickly, try independent commercial brokers Commercial Lifeline, specialists in Commercial Bridging Finance and Commercial Mortgages.

Download our free Commercial Mortgage guides by visiting our Commercial Mortgage Guide page.

This article comes with reprint rights. Feel free to reprint and distribute as you like. All that we ask is that you do not make any changes, that this resource text is include, and that the link above is intact.

Other Article Sites

findabook.com  moneycd.info  a-mortgage.info   about-lemon-laws.info  aboutstudentloans.info
all-about-publishing.info  auctions-articles.info  bestcollege-university.com  bestispconnection.com
biblefolder.com  blogger-website.com  books-used.info  brokers-guide.info  buywindows.info  cable-dsl.info
career-miner.com  carpel-tunnel.info  cashinaflash.info  cashloanreviews.info  casinobell.com  chat-house.info
clearmycredit.info  collegeloantips.info  crones.info  depression-articles.info   dirnic.net  dishguides.info
divers-below.com  expodog.info   financewizz.com  fire-insurance.info  getgood.info  handleit.net   it-idea.info
health-supplies.info  hosting-right.com  insidealert.com  insurance-facts.info  jobs-employment.info
justgood.info  lookgold.net   lowcost-travel.info  money-source.info  myhostzone.info  numisblog.com
peoplesearchfinder.info  pr-articles.info  realeas.com   refinancing-guides.info  spyware-remove.info
telelot.info  the-law.info   toppaid.info  travel-deals.info  travelcorrect.com  wedding-guide-site.com
your-blog.info  your-credit.info

PROPHIX Brings Control Back to Finance at FEI Summit 2008
PROPHIX will be discussing the virtues of its entire suite of financial performance management solutions, including PROPHIX for SQL Server?, PROPHIX Enterprise and PROPHIX Express, throughout the Financial Executives International Summit (FEI) Summit 2008 in Phoenix, Arizona at booth #520. Attendees are encouraged to drop by and watch a 10-minute interactive demo and enter for a chance to win a GPS navigation system.

Obelisk International Highlights the Importance of Due Diligence in Overseas Property Investment
Overseas property ownership is now easier and safer for investors thanks to Obelisk International's investment news of their compulsory Due Diligence procedure simplifying the legal mine field that exists in many foreign jurisdictions.

Purchase Order Factoring: Short-Term Solution to Finance Large Purchase
The first aspect to acknowledge when seeking purchase order financing is that most factoring companies are very choosy when dealing with this type of financing. There is not a firm set of regulations to follow concerning invoice financing because each situation is very unique and has to be assessed as such. It is typically very difficult to find purchase order financing however, there are factoring companies out there that are willing to take that type of risk.

Investment Strategy ? How To Profit By Investing In Mutual Funds
Mutual funds are an interesting investment strategy. Here is a pool of money that is supplied by the investors which is then invested in a variety of stocks, bonds, and other money markets. Check out how to profit by investing in mutual funds.

Day Trading Worth The Investment?
Some of the riskiest investing that can be done in the stock market exists within what is called day trading. This practice is deemed risky and the results have proven themselves time after time. Vat fortunes can be lost within mere seconds if one is not careful with day trading so why do so many people engage in this activity?

NAMP and FHA Online University Team up to Educate Mortgage Professionals about the New FHASecure Initiative
The National Association of Mortgage Processors (NAMP) is offering online classes through FHA Online University to enable mortgage professionals help borrowers through the recently developed FHASecure initiative. Through FHA Online University's FHASecure course, borrowers with good credit will be able to rebound from the strains of the currently volatile mortgage market.

Mortgage Loans For People With Bad Credit
There are a number of mortgage lenders that will work with people who have bad credit. When it comes to obtaining a low mortgage rate, the information on your credit report will play a pivotal role in the interest rates you are given. In most cases, those with less than desirable credit will be given mortgages that have much higher interest rates than applicants who have good credit. In addition to this, most lenders will provide more favorable terms to those that have good credit. To get an excellent interest rate on your mortgage, you will at least want to have a credit score of 720 or higher. Fortunately, there is a sizeable market of potential homeowners who do not have good credit, and there a number of lenders who cater to these peopl...

Top 7 Reasons To Use A Mortgage Broker
Mortgage expenses are most times the largest monthly expense home owners have, yet when purchasing a new home, most people never comparison shop for the right mortgage rate. Over the course of a 15 or 20 year mortgage, this can cost the homeowner thousands of dollars.

Online Banking Services - 4 Great Reasons to Use Them
In this modern day of technology, more and more things are becoming computerized, and your banking is no exception. While in recent years you had to go to a bank to deal with your bank account and various other related activities, now days most banks actually provide their customers with online banking services, which takes banking to a whole new level. Now you may be wondering if banking online is really such a great choice, but the following are four really great reasons that you may never want to go back to banking the way it was before you could bank online.

More Good Reasons for Property Investment in Spain
Now there are more good reasons to buy property in Spain ? The Capital Gains Tax has dropped from 35% on the net gain to 18% for foreign property buyers.

Connecticut Home Mortgage: FHA Mortgage Loans for Everybody!
There's good news for Connecticut homeowners. FHA loan requirements have changed for Connecticut mortgage loans. More specifically the changes directly impact Connecticut adjustable rate mortgages.

Home or Investment Property Equity: Be Sure the Bank Gives You All that You Deserve
Home equity is your own personal money machine. If you want financial freedom, a home equity loan is probably the best way to achieve it.

What Does The Market Say About Property Investment Right Now?
Is not the right time for property investment? You likely have seen the headlines in which mortgages are hitting an all time high in terms of foreclosure. The costs are high across the board and even though many people are foreclosure due to the sub prime lending market, or even because of the overall fact that adjustable rates do not work well, the bottom line to any real estate investor is knowing if right now is the right time to invest. The good news to the property investors out there is that now is the right time to invest for a number of reasons. Regardless of the method you have selected to use in real estate investments, it has never been a better time to consider property investments.

Successful Mortgage Website Design  Four Important Elements
There are many important elements to take into consideration when building a mortgage website. These elements will help determine how successful a mortgage website is at gaining organic search engine results, converting visitors to mortgage leads, and overall lead generation success.