Bridge Loans Bridge Loan Lenders
North Coast Financial are bridge loan lenders who have been providing real estate investors with hard money bridge loans for 35 years. Offering fast approvals and funding. competitive rates and reliable service . North Coast Financial has established themselves as one of the top hard money bridge loan lenders in California.
Bridge Loans Offered by North Coast Financial:
- Property Types:
$25,000 – $1 Million+
6 to 36 months, longer terms also available
1sts and 2nds
Up to 75% of current value of property
Minimum 3 months interest
No hidden junk fees (underwriting, document, processing, etc.)
Please contact us for information on current rates and points
Hard Money Bridge Loans
A bridge loan is a type of hard money loan used for short-term financing. Bridge financing typically has a term from one month to one year. Bridge loan rates are higher than traditional institution loans due to the increased risk. Bridge loan lenders are less concerned with the credit worthiness of the borrower since the bridge loan is secured by property. This is beneficial for borrowers who may currently have less than ideal credit but have equity in property.
Bridge loans have lower loan to value (LTV) ratios than traditional mortgages obtained from banks in order to protect the lender from a borrower defaulting. The bridge loan lender will generally only allow for a loan to value ratio of 70-75%. The borrower may sell the property or arrange other long-term financing in order to pay off the bridge loan.
Residential Bridge Loans and Commercial Bridge Loans
Residential bridge loans and commercial bridge loans are both gaining popularity as a way to quickly acquire cash in order to take advantage of short-term real estate opportunities. Commercial bridge loans generally have a lower LTV than residential bridge loans and the bridge loan lenders will require additional information and documentation.
A bridge loan may also be called a bridging loan, gap financing, interim financing or a swing loan.
Bridge Loan Example
An example of a traditional bridge loan would be when an investor owns a property and wishes to purchase a new property. The investor doesn t have sufficient funds to purchase the new property but needs to secure the new property before selling the existing property. The investor is able to use bridge loan financing to borrower against the property they already own to raise funds for the purchase of the new property.
Once the new property is purchased, the investor can sell their original property and pay off the bridge loan. The bridge loan bridges the gap between the purchase of the new property and the sale of the existing property.
Bridge Loan Frequently Asked Questions:
What is a bridge loan?
A bridge loan is a short-term loan that “bridges the gap” between other types of long-term financing. Bridge financing is secured by real estate and have higher interest rates than conventional loans due to the higher risk associated with these loans. They are designed for investors and borrowers who are involved in real estate projects or transactions such as hard money rehabs, making improvements on land, and purchasing short sales or foreclosures. Residential bridge loans and commercial bridge loans are available to property owners who wish to borrower against the equity in their property.
How does one get a bridge loan?
Bridge loan financing is a straightforward process when compared to obtaining a financing from a conventional lender such as a bank or credit union. Simply contact a bridge loan lender and complete their application process. The bridge lender will require information about the borrower and the subject property. They will then analyze this information and confirm the value of the property. The bridge loan lender will then determine how much they can lend and what loan terms are available for the borrower. The loan should be able to be funded within a week.
How do bridge loans work?
The property owner borrows against real estate they already own and pulls out equity with the bridge loan. The proceeds from the bridge loan financing are then used to purchase a new property. Once the new property is secured, the original property is sold so the bridge loan can be paid off.
When should one use a bridge loan?
Bridge financing should be utilized when the borrower needs capital quickly and only for a short amount of time (approximately 12 months or less). The borrower must also have real property to use as collateral to borrow against or have a large enough down payment (35% or more) to use towards a purchase if they are acquiring a new property with the proceeds from the bridge loan financing.
If a borrower is unable to obtain financing from a conventional lender due to credit issues, recent short sales or foreclosures on their record, or if they currently own too many properties, a hard money bridge loan would be a suitable short-term option.