Scenario: Your client’s closing date for the purchase of their new home is August 1 and the closing date of the sale of their old home is August 15. They need the equity from their old home for the down payment of their new home.
Solution: Bridge Financing.
It varies but there will be a fee of $250-$400 plus interest (P+2% or P+3%). Note that the bridge loan is only the amount of down payment minus deposit so interest costs are minimal. There will also be an extra fee from the solicitor. Things to note:
- Usually lenders want less than 30 days difference on the dates.
- The payments for the long term mortgage are not affected by bridge financing. For example the client's regular mortgage payment is on payment schedule.
- The buyer must still pay the property transfer tax, legal fee and other closing costs upfront from their cash resources.
- The buyer must stay with the lender that they do the bridging with. For example they might have a 5 yr variable with that lender.
- A low cost bridge finance must have 2 firm, subject free contracts otherwise we take the mortgage to a private lender and the costs increase dramatically.
- Application must be otherwise strong.
- Some clients have a false impression about bridge financing until details are explained to them. When handled properly bridging is very convenient for some clients
Sign up to VOW and access:
I make myself available at all times. My web site is here to help you 24 hours a day. You can search listings at your own convenience, browse reports, and read up on real estate info on your own terms.
- 333% More Listing Info
- New Listings Sooner
- Save Your Searches
- Email Alerts & more!
The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Real Estate Board of Greater Vancouver (REBGV), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the REBGV, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the REBGV, the FVREB or the CADREB.