Bridge Loans

A bridge loan is a less common type of mortgage loan that is very short in duration and is meant to “bridge” the gap until a more traditional mortgage loan is taken out. Generally, these loans are used to finance the purchase of a property in transition, or to otherwise take advantage of a limited-time opportunity. Because they are fairly high-risk and speculative, most traditional lending institutions do not offer them, although some private investment firms may.

If you are interested in learning more about obtaining a bridge loan, contact the Maryland mortgage modification lawyers of Chaifetz & Coyle, P.C., by calling 443-546-4608 today.

Why Take a Bridge Loan?

Bridge loans are frequently used in real estate to close escrow quickly or prevent a property from being foreclosed upon. The bridge loan has a short duration, usually between as little as a few weeks to as long as a few years. The loan is paid off when the property is sold or refinanced under a more traditional loan agreement. Oftentimes, a bridge loan is taken out to pay for a new property while an old property is being sold, thus allowing the borrower a bit of economic freedom while the sale of his or her property is ongoing. Once that property is sold, the money from the sale is used to pay off the bridge loan.

Because of the short term of the loan, bridge loans usually have a high interest rate of between 12 and 15% per year. Most financial institutions are unable to offer such loans, although private investment firms often will.

Contact Us

Though they are highly specific in nature, a bridge loan may be just what you're looking for. If you would like to know more about the legality and specifics of bridge loans, contact the Maryland mortgage modification attorneys of Chaifetz & Coyle, P.C., by calling 443-546-4608.