How Can A Real Estate Lawyer Help You With Bridge Financing

May 30, 2021 Off Comments in Pemberton Real Estate, Whistler Real Estate
How Can A Real Estate Lawyer Help You With Bridge Financing

What is bridge financing?

One of the trickier parts of moving to a new home is getting the timing right. You need to vacate your current home and have it clean and ready for the new owners while you are also moving all your belongings into your new residence. It is a challenging process, and you would almost certainly benefit from having a little extra time to get everything done. Completing the sale of your old home a few days after settling into the new one can give you this time, but how do you manage that if you are using the equity from the sale to purchase your new property? How do you arrange for the purchase funds if the sale only goes through after the new home is purchased?

In most cases, the answer will be bridge financing.

Just as the name implies, bridge financing is a short-term loan that bridges the time between the new purchase and the sale of your old home. While the interest will usually be higher than a conventional mortgage, the short duration for which it is needed means it will likely cost a couple hundred dollars for both the loan itself and the associated fees, which can be extremely worthwhile to make life easier for your move. Speak with your mortgage broker early to see if you qualify for bridge financing, and consult your lawyer to learn what the legal fees and legal consequences are for any options presented to you by your bank.

Bridge financing can be helpful to you if sellers in your area won’t accept contingent offers, or if you can’t afford a down payment without the proceeds from selling your current home.

Your real estate lawyer will help you with your bridge financing in several ways. They will effectively be required to register the bridge financing as another loan on your home. If you need a large amount ($200,000 or more) or if the loan will last more than 120 days, the lender may register a lien on your property. Your real estate lawyer will be required to have the lien removed.

Bridge Loans

Bridge loans are only offered by the mortgage provider of the new home. Given that there is some possibility of your existing home not closing, there is a certain degree of risk for your bank. Accordingly, your lawyer will need to provide and undertaking to register a mortgage on your new residence, on the off chance that the sale of your current home does not proceed.

bridge financing

Bridge financing can be helpful to you if sellers in your area won’t accept contingent offers, or if you can’t afford a down payment without the proceeds from selling your current home. Just be sure to seek the advice and guidance of your real estate lawyer, who will help make the process as simple as possible.

If you have questions about bridge financing, contact us today and we will be happy to answer all your questions.

For more information on Bridge Financing click here.