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What Are Bridge Loans and How Do They Work, bridge loan.#Bridge #loan


What Exactly are Bridge Loans?

Bridge loan

Bridge loans are popular in certain types of real estate markets. Whether bridge loans are a good option for you depends on several factors. The reason buyers take out a bridge loan is to buy another home before selling an existing residence. That may sound like an ideal solution, but a bridge loan is not without risk.

For example, when a home buyer is buying another home before selling an existing home, two common ways to find the down payment for the move-up home is through financing either a bridge loan or a home equity loan (or home equity line of credit).

I advise sellers to wait before buying a home and sell the existing home first, but many feel an urge to locate their move up home first.

If you are absolutely certain your existing home will sell, it will alleviate fears about what happens if it does not. You might want to talk with a trusted advisor before pursuing a bridge loan. The main advantage to a bridge loan is to avoid a contingent offer and make your move-up offer all that more attractive to a seller.

Generally, a home equity loan is less expensive, but bridge loans contain more benefits for some borrowers. In addition, many lenders will not lend on a home equity loan if the home is on the market. Smart borrowers will compare the benefits between the two loans to determine which is a better fit for their particular situation and plan ahead before making an offer to purchase another home.

A major benefit to a bridge loan is the fact it allows you to buy a new home without a contingency to sell.

In seller s markets, many sellers will not accept a contingent offer. If you have a home to sell, that could mean you might not be able to buy a home any other way than without a contingency.

What Are Bridge Loans?

Bridge loans are temporary loans that bridge the gap between the sales price of a new home and a home buyer s new mortgage, in the event the buyer s home has not yet sold.

The bridge loan is secured to the buyer s existing home. The funds from the bridge loan are then used as a down payment for the move-up home.

How Do Bridge Loans Work?

Many lenders do not have set guidelines for FICO minimums nor debt-to-income ratios. Funding is guided by a more make sense underwriting approach. The piece of the puzzle that requires guidelines is the long-term financing obtained on the new home.

Some lenders who make conforming loans exclude the bridge loan payment for qualifying purposes. This means the borrower is qualified to buy the move-up home by adding together the existing loan payment, if any, on the buyer s existing home to the new mortgage payment of the move-up home. The reasons many lenders qualify the buyer on two payments are because:

  • Most buyers have an existing first mortgage on a present home.
  • The buyer will likely close the move-up home purchase before selling an existing residence.
  • For a short-term period, the buyer will own two homes.

If the new home mortgage is a conforming loan, lenders have more leeway to accept a higher debt-to-income ratio by running the mortgage loan through an automated underwriting program. If the new home mortgage is a jumbo loan, most lenders will restrict the home buyer to a 50% debt-to-income ratio.

Average Fees for Bridge Loans

Rates will vary among lenders, but following is an average estimate for a bridge loan in California. Interest rates fluctuate, but for this example, let s use 8.5%. This type of bridge loan will carry no payments for four months; however, interest will accrue and be due when the loan is paid upon sale of the property. Here are sample fees, submitted by an actual mortgage broker*:

In addition, there is a loan origination fee on bridge loans based on the amount of the loan. Each point is equal to 1% of the loan amount. Here are average fees, submitted by a mortgage broker*. Again, fees will vary.


Bridge Loan Calculator, bridge loan.#Bridge #loan


Bridge Loan Calculator

Bridge loans are most commonly reserved for real estate financing though they don’t have to be. A bridge loan is usually a short term loan that provide funds for purchasing an asset (such as a home) when the cash-on-hand along with the primary loan is not enough to pay for the asset.

For example, if you currently have $50,000 cash and a home that you are selling for $400,000 for which there is a balance on the mortgage of $200,000 and you plan to buy a home for $800,000, you might be a candidate for a bridge loan.

If the lending institution for the new mortgage requires that you put a deposit of 20% down, $160,000, at closing, you will not have the cash if the closing has not taken place on your current home. This is where a bridge loan can be used.

-$50,000 cash on hand

-$640,000 mortgage available

$110,000 covered by bridge loan

The new home mortgage will be $640,000 (800,000 – 160,000 = 640,000). The selling price less the cash on hand and the mortgage money available leaves a short of $110,000. This is the amount covered by the bridge loan. A bridge loan is typically an interest only loan. This means you make only interest payments. The loan is also usually a short term loan offered at a higher interest rate. The idea is that once the first property is sold, the bridge loan will be paid off immediately from the $200,000 net proceeds from the sale of the first house.

That’s the background. This calculator will calculate your total payment for the primary new mortgage and the interest only bridge loan payment. The bridge loan has no term for it is due when the closing occurs on the first house. The only thing you have to know about the bridge loan is the annual rate of interest you’ll be charged.

Anticipated Bridge Loan Term? (#) Enter number of months you anticipate needing a bridge loan. That is, how many months you think it will be until you close on the property you are selling. This value does not impact the bridge loan amount. It impacts the payment schedule and charts.

This calculator makes these assumptions:

1) payment for both loans are made monthly

2) the bridge loan is an interest only loan (payments never go toward principal)

Bridge loan


How to Calculate a Bridge Loan, bridge loan.#Bridge #loan


How to Calculate a Bridge Loan

You are moving and you ve found a great house to buy, but there s a problem. Your old property hasn t sold yet. That means you are still making mortgage payments and you can t use the equity in your present home for a down payment. One option to think about is a bridge loan. Bridge loans carry risks, but they can be a way to secure a new property when you don t have time to wait for the old one to sell.

Function of a Bridge Loan

Bridge loans are short-term financing vehicles intended to cover a gap between the time you purchase a new home and sell the old one. Six months is a typical time frame for a bridge loan. Homeowners use bridge loans to obtain cash for a down payment on a new house quickly. Some homeowners choose bridge loans to pay off mortgages and forestall foreclosure. The bridge loan buys these distressed homeowners more time to sell the property instead.

How a Bridge Loan Works

Suppose you are moving because your employer has transferred you. You go to a lender and take out a bridge loan against the equity in your current house to use as a down payment on a new house. The amount you borrow includes points, fees and interest points. Terms of a bridge loan vary. For example, some lenders allow you to borrow enough to pay off your old mortgage. Your current home is collateral for the bridge loan. When the current property is sold, the money pays off the bridge loan.

Calculating Bridge Loans

To calculate a bridge loan, you need to know how much money is required as a down payment on the new property as well as the outstanding balance of the current mortgage. You also need to know the fees and points the lender will charge. Suppose your home is appraised at $250,000 and the lender will allow up to 80 percent of that amount to raise cash and pay off the old mortgage, or $200,000. The current mortgage balance is $150,000. Assume this lender charges 2 points, meaning 2 percent of the bridge loan amount of $200,000. Add 1 percent in prepaid interest and fees. Points and fees come to $6,000. Subtract $6,000 and $150,000 from the $200,000 loan amount. You have $44,000 cash to make a down payment on the new house.

The Upside and Downside

If you need to get out of your old home and mortgage quickly, a bridge loan can be a lifesaver because it can raise the cash to buy the home you want before another buyer beats you to it. However, bridge loans can be expensive. In the example above, the cost is $6,000 plus the interest that accrues until the loan is paid off. Bridge loans also carry risk. Your existing home is collateral and can be foreclosed on if the loan isn t paid. That can happen if the property doesn t sell before the bridge loan comes due or if the housing market turns sour and you are unable to sell for enough to pay off the bridge loan.


Bank Statement Loan, bridge loans.#Bridge #loans


Small Business Loans Depot

Bank Statement Loan

November 14, 2017. Niche bank statement loans program for your business.

Credit scores as low as 500 and lower in some cases.

Time in business as short as only 4 months may be available.

Provide the most recent 3 months complete business checking account statements.

Complete the Secure DocuSign Application.

Get a bank statement loan today based on your company sales. If your business has 3 months of revenue, get business bank statement funding based on sales

Many businesses have excellent cash flow and payment history. Even so, they are often declined because of limited collateral or unsatisfactory personal credit. These businesses feel they should have access to capital.

We agree. Small business loans depot can provide business bank statement financing quickly. Based on your Business revenue, we can get your business the capital it needs within 3 to 5 business days or less.

Bank Statement Loans for businesses

Business Bank Statement loans include the following features:

The highest approval percentage of any business financing.

Every business has Cash flow, many businesses can qualify.

Only 3 months bank statements requested.

Just a short 1 page application is needed.

Fast turnaround, one or two day approval common.

Get your Bank Statement Loan today. Call us now at Tel: 919-771-4177 or Toll Free: 855-787-1113.

Daily, weekly and monthly repayment options are available.

Large business loans available. Programs for a business loan over $100,000, $150,000 and $250,000.

Other documentation may be requested on a case by case basis.

Contact us today. Get your business funded. Start now.

Other bank statement loan features:

Up to 100% of a customer s total monthly deposits may be approved. If your business has average monthly deposits of $50,000, then an approval up to $62,500 may be possible depending on other factors. If the businesses average daily balance is strong, the approval amount can be higher.

Some Bank Statement Loan programs can be used similar to a line of credit. The customer uses the line and repays at their discretion. The customer can use the full line or part of the line amount again immediately. The line can also be left idle for months until it is needed again. This line does not require an annual pay down. Annual or quarterly financial statements are not needed for bank statement financing, also known as an ACH Business loan.

Provide the most recent 3 months business checking account statements. The higher the total deposits per month are, the more the bank statement loan amount may be.

Required to qualify or pre-qualify.

Signed and dated application from 50% of ownership.

Last 3 months complete business bank statements from main business operating

For amounts over $150,000: The most recent 6 months business bank statements

and first page of the most recent business tax return.

Other requirements may apply.

General Requirements for Loan Contracts:

Valid and clear driver s license.

Voided business check for approved account.

Valid E-Mail address for owners.

Federal Tax ID number, or TIN.

Other documentation required on a case by case basis.

Other business bank statement loan customer benefits often available:

New loans may be offered 60 days after closing first loan for certain programs

depending on eligibility.

Renewals and renewal options often begin at 40% pay down of balance.

No standard site inspection for most clients.

Tax Liens $175,000 may be accepted.

Bankruptcies 1 Year usually O.K.

Only 50% ownership required in some cases.

Soft Credit pull for certain programs.

No personal guarantee required for some programs.

Loans are amortized daily for certain programs.

No prepayment penalty for certain programs, if qualified.

The newest option is an open Tax lien business loan under $10,000, which may be approvable. An IRS payment arrangement is not required. 3 month to 12 month terms are available if qualified. Business with an open tax lien and no payment arrangement can be financed.

May 11, 2017, Richmond, VA for immediate release. Union Books completes a $50,000 business bank statement loan. The company determined they needed to make changes with their business operations. Owner Stephen Ivy told the Richmond Bizsense how Union Books will use the funding. We will use this funding to make numerous technology, advertising and and social media changes to boost sales. Local sales opportunities are available using social medial platforms. We expect to increase sales by 15% in the next 12 months and 30% in the next 24 months. We look forward to working with

smallbusinessloansdepot.com for other financing needs in the future. Union Books continues financing transactions to date.

Frequently asked business bank statement financing Questions:

Are all these products about the same?

These products fall under one basic product type. Callers call in with many different requests. Requests from callers include a business bank statement loan and a loan based on bank statements . Other requests from callers include a business loan using bank statements . bank statement loan for business , and bank statement financing are also requested.

What is the maximum we can get?

The bank statement loan line size depends upon the total dollar amount of deposits per month and the average daily balance. Time in business is looked at. There is no minimum credit score.

Is this product available nationwide?

Yes. This product is available in many cities. Business owners can speak with local representatives. It is available in Canada. It is not available in Puerto Rico or other U.S. Territories.

How long does funding take under the bank statement loans program?

First submit your bank statements. If approved, approvals are usually obtained in 24 to 48 hours. Funds can be transferred into your business checking account within 24 to 48 hours of receiving completed closing documents and meeting closing conditions.

How long is the repay time?

The term of these bank statement loans are between 2-18 months. Term options depend on cash flow and time in business.

Overdrafts and Insufficient Funds days. A Maximum of 5 per month are preferred.

Thank you for visiting our business Bank Statement Loan resource page!

Visit the SBA and learn how to develop a business plan and financial statements.


Bridge loans are making a comeback among home buyers, bridge loans.#Bridge #loans


Bridge loans are making a comeback among home buyers

CLEVELAND, Ohio — A decade after the financial crisis and housing collapse, more consumers seem in the mood to buy a new home before they sell their existing home.

Back in the mid-2000s and before, homebuyers often obtained bridge loans to give them money to buy a new home while they were waiting on their current home to sell. But with the housing implosion that started in 2007, consumers lost their willingness to own two homes at the same time and banks lost their desire to finance them anyway.

Now, bridge loans are making a bit of comeback.

At one of Ohio’s largest lenders, Third Federal Savings in Cleveland, the volume of bridge loans has increased by 137 percent since last year. In fact, about 15 percent of purchase loans at Third Federal involve a bridge loan these days.

Part of what’s happening is the housing market is relatively hot, particularly in middle-class neighborhoods. Buyers don’t want to miss losing out on the perfect house. Sellers won’t even think about accepting a buyer with a contingency that she has to sell her existing house first.

On the flip side, if a homeowner decides to sell before buying, and the home sells before a new home is purchased, then the family faces moving into temporary housing.

A bridge loan can solve that. With a bridge loan, a buyer can borrow against the value in their home. That bridge loan can be used to pay off the mortgage on their existing home, and then use what’s left for a downpayment on the new home. Payments on the bridge loan aren’t due until the home is sold. The bridge loan generally doesn’t count toward debt-to-income ratios, according to the American Bankers Association.

“You’re able to use the equity in your current home before you sell it,” said Meredith Weil, chief operating officer at Third Federal.

For example, if you own a home worth $225,000 and have a mortgage balance of $125,000. If you get a bridge loan for $200,000, you could pay off the existing $125,000 mortgage and have $75,000 to use as a downpayment on your next home. Theoretically, you could buy a $375,000 home with a 20 percent downpayment — the $75,000.

First Federal Lakewood is one of the only other major local banks that offers bridge loans. Banks such as PNC and Fifth Third don’t offer them.

Dollar Bank stopped offering them about 15 years ago “because we didn’t have much demand for them,” said spokeswoman Lisa King.

At First Federal Lakewood, bridge loans actually took off in popularity after the financial crisis, said Mary Ann Stropkay, senior vice president of residential lending. After the housing collapse, a lot of banks weren’t lending to someone who already had a mortgage, she said. “The bridge loan became a logical product.”

Bridge loans are especially popular for home owners building their next home, Stropkay said. “We use it quite frequently.” The bank has close 42 so far this year.

At Third Federal, the bank never stopped offering bridge loans but just hadn’t seen much interest in them until recently, Weil said, because “the confidence to buy before they sell didn’t exist . . . We’re starting to see that confidence come back.”

The bridge loan isn’t without a hitch; the borrower is expected to sell his home and repay the loan within a year. There’s a fee if the loan isn’t repaid on time.

The upsides of a bridge loan: No monthly payments are required in the interim; the interest is added to the loan balance. This can be huge if a household can’t afford two mortgages at the same time.

The downside: Bridge loans can be expensive.

Third Federal began actively marketing bridge loans again in May. “We are hopeful this will help people,” Weil said. “It’s really an option for a borrower, if they found their dream house but haven’t put their house on the market.”

Third Federal Chairman and CEO Marc Stefanski said many markets face low housing inventory, and borrowers often need to pull the trigger fast to get their bid accepted.


What Are Bridge Loans and How Do They Work, bridge loans.#Bridge #loans


What Exactly are Bridge Loans?

Bridge loans

Bridge loans

Bridge loans are popular in certain types of real estate markets. Whether bridge loans are a good option for you depends on several factors. The reason buyers take out a bridge loan is to buy another home before selling an existing residence. That may sound like an ideal solution, but a bridge loan is not without risk.

For example, when a home buyer is buying another home before selling an existing home, two common ways to find the down payment for the move-up home is through financing either a bridge loan or a home equity loan (or home equity line of credit).

I advise sellers to wait before buying a home and sell the existing home first, but many feel an urge to locate their move up home first.

If you are absolutely certain your existing home will sell, it will alleviate fears about what happens if it does not. You might want to talk with a trusted advisor before pursuing a bridge loan. The main advantage to a bridge loan is to avoid a contingent offer and make your move-up offer all that more attractive to a seller.

Generally, a home equity loan is less expensive, but bridge loans contain more benefits for some borrowers. In addition, many lenders will not lend on a home equity loan if the home is on the market. Smart borrowers will compare the benefits between the two loans to determine which is a better fit for their particular situation and plan ahead before making an offer to purchase another home.

A major benefit to a bridge loan is the fact it allows you to buy a new home without a contingency to sell.

In seller s markets, many sellers will not accept a contingent offer. If you have a home to sell, that could mean you might not be able to buy a home any other way than without a contingency.

What Are Bridge Loans?

Bridge loans are temporary loans that bridge the gap between the sales price of a new home and a home buyer s new mortgage, in the event the buyer s home has not yet sold.

The bridge loan is secured to the buyer s existing home. The funds from the bridge loan are then used as a down payment for the move-up home.

How Do Bridge Loans Work?

Many lenders do not have set guidelines for FICO minimums nor debt-to-income ratios. Funding is guided by a more make sense underwriting approach. The piece of the puzzle that requires guidelines is the long-term financing obtained on the new home.

Some lenders who make conforming loans exclude the bridge loan payment for qualifying purposes. This means the borrower is qualified to buy the move-up home by adding together the existing loan payment, if any, on the buyer s existing home to the new mortgage payment of the move-up home. The reasons many lenders qualify the buyer on two payments are because:

  • Most buyers have an existing first mortgage on a present home.
  • The buyer will likely close the move-up home purchase before selling an existing residence.
  • For a short-term period, the buyer will own two homes.

If the new home mortgage is a conforming loan, lenders have more leeway to accept a higher debt-to-income ratio by running the mortgage loan through an automated underwriting program. If the new home mortgage is a jumbo loan, most lenders will restrict the home buyer to a 50% debt-to-income ratio.

Average Fees for Bridge Loans

Rates will vary among lenders, but following is an average estimate for a bridge loan in California. Interest rates fluctuate, but for this example, let s use 8.5%. This type of bridge loan will carry no payments for four months; however, interest will accrue and be due when the loan is paid upon sale of the property. Here are sample fees, submitted by an actual mortgage broker*:

In addition, there is a loan origination fee on bridge loans based on the amount of the loan. Each point is equal to 1% of the loan amount. Here are average fees, submitted by a mortgage broker*. Again, fees will vary.

  • $100,000 to $150,000 .75 points
  • $150,000 to $250,000 1.0 points

Home Buying Benefits of Bridge Loans

  • The buyer can immediately put her home on the market and buy without restrictions.
  • Bridge loans may not require monthly payments for a few months.
  • If the buyer has made a contingent offer to buy and the seller issues a Notice to Perform, the buyer can remove the contingency to sell and still move forward with the purchase.

Home Buying Drawbacks of Bridge Loans

  • Bridge loans cost more than home equity loans.
  • Buyers will be qualified by the lender to own two homes and many may not meet this stringent requirement.
  • Making two mortgage payments, plus accruing interest on a bridge loan, could cause stress.

*Note: Thanks to Evelyne Jamet at Vitek Mortgage for providing the sample bridge loan fees.

DISCLOSURE: Vitek Mortgage is a preferred vendor for my employing brokerage and enjoys an affiliated relationship with Lyon Real Estate.

At the time of writing, Elizabeth Weintraub, CalBRE #00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.


Bridge loans#Bridge #loans


bridge loans

Bridge loans

  1. Review eligibility requirements and loan process .
  2. Download, complete and sign the application form Small Business or Citrus Business .

  • Contact and provide completed and signed application and support documentation to your local Florida Small Business Development Center (SBDC). Find your local SBDC at www.FloridaSBDC.org/locations .
  • The Florida Small Business Emergency Bridge Loan Program was activated by Gov. Rick Scott on Sept. 14, 2017, as a result of Hurricane Irma. On. Oct. 6, the program was expanded to include Florida’s citrus businesses.

    This interest-free loan program is currently available to small business owners and citrus businesses throughout Florida that experienced physical and/or economic damage as a result of the storm. Small business owners can qualify for up to $50,000 and citrus growers up to $150,000.

    The program provides a source of expedient cash flow to Florida small businesses that have been physically and/or economically impacted by the storm. These short-term, interest-free working capital loans are intended to “bridge the gap” between the time a major catastrophe hits and when a business has secured longer term recovery resources, such as sufficient profits from a revived business, receipt of payments on insurance claims or federal disaster assistance.

    The Emergency Bridge Loan Program is not designed to be the primary source of assistance to affected small businesses, which is why eligibility is linked to pursuit of other sources. Note: Loans made under this program are short-term debt loans made by the state of Florida using public funds. They are not grants . Emergency bridge loans require repayment by the approved applicant from business receipts, insurance proceeds received, or longer-term disaster recovery assistance.

    • Designated Disaster Area: All of Florida s 67 counties.
    • Qualified Applicant: Applications will be accepted by qualified for-profit, privately held small businesses that maintain a place of business in the state of Florida OR citrus businesses who maintain a citrus grove in production in the state. All qualified applicants must have been established prior to Sept. 4, 2017, and suffered physical damage and/or economic injury as a result of the designated disaster. Qualified small business applicants must be an employer business with a minimum of two (2) and maximum of one hundred (100) employees. Note: The employee requirement does not apply to citrus businesses . Citrus Growers: Go Here for details and to apply for an emergency loan.
    • Amount: Between $1,000 and $50,000 for eligible small businesses; and up to $150,000 for eligible citrus businesses.
    • Term: 90 or 180 days based on individual business circumstances for eligible small businesses; and one (1) year for eligible citrus businesses.
    • Interest: Loans will be interest-free for the loan term.
    • Payments: Payments are not required during the established loan term, but loans must be paid in full by end of the designated loan term, otherwise the loan will be considered in default and penalties apply.
    • Payment Process: Loan payments will be made directly by borrowers to Florida First Capital Finance Corporation, the state of Florida appointed fiscal administrator of the program.
    • Non-Payment Penalties: Penalties for non-payment will begin at the expiration of the established term of each loan, and will be as follows:
      • 12% per annum on the unpaid balance for the first 180 days following expiration of the established term.
      • 18% per annum on the unpaid balance thereafter.
      • Default is subject to normal commercial collection process.

    Applications will be accepted by qualified Florida small businesses and citrus businesses under this program through Nov. 30, 2017 , contingent on availability of funds.


    LOAN stock quote – Manhattan Bridge Capital, Inc price, bridge loan.#Bridge #loan


    Manhattan Bridge Capital, Inc Quote & Summary Data

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    Company Description (as filed with the SEC)

    We are a New York-based real estate finance company that specializes in originating, servicing and managing a portfolio of first mortgage loans. We offer short-term, secured, non-banking loans (sometimes referred to as “hard money” loans), which we may renew or extend on, before or after their initial term expires, to real estate investors to fund their acquisition, renovation, rehabilitation or improvement of properties located in the New York metropolitan area. We are organized and conduct our operations to qualify as a real estate investment trust for federal income tax purposes (“REIT”). We have qualified for taxation as a REIT beginning with our taxable year ended December 31, 2014. We are organized as a New York corporation and operated as a fully-taxable C-corporation for federal and state income tax purposes through the end of our 2013 tax year. As a result, we were able to re-invest most of our net after-tax profits back into our business. . More .

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    Bridge loan


    How to Calculate a Bridge Loan, bridge loan.#Bridge #loan


    How to Calculate a Bridge Loan

    You are moving and you ve found a great house to buy, but there s a problem. Your old property hasn t sold yet. That means you are still making mortgage payments and you can t use the equity in your present home for a down payment. One option to think about is a bridge loan. Bridge loans carry risks, but they can be a way to secure a new property when you don t have time to wait for the old one to sell.

    Function of a Bridge Loan

    Bridge loans are short-term financing vehicles intended to cover a gap between the time you purchase a new home and sell the old one. Six months is a typical time frame for a bridge loan. Homeowners use bridge loans to obtain cash for a down payment on a new house quickly. Some homeowners choose bridge loans to pay off mortgages and forestall foreclosure. The bridge loan buys these distressed homeowners more time to sell the property instead.

    How a Bridge Loan Works

    Suppose you are moving because your employer has transferred you. You go to a lender and take out a bridge loan against the equity in your current house to use as a down payment on a new house. The amount you borrow includes points, fees and interest points. Terms of a bridge loan vary. For example, some lenders allow you to borrow enough to pay off your old mortgage. Your current home is collateral for the bridge loan. When the current property is sold, the money pays off the bridge loan.

    Calculating Bridge Loans

    To calculate a bridge loan, you need to know how much money is required as a down payment on the new property as well as the outstanding balance of the current mortgage. You also need to know the fees and points the lender will charge. Suppose your home is appraised at $250,000 and the lender will allow up to 80 percent of that amount to raise cash and pay off the old mortgage, or $200,000. The current mortgage balance is $150,000. Assume this lender charges 2 points, meaning 2 percent of the bridge loan amount of $200,000. Add 1 percent in prepaid interest and fees. Points and fees come to $6,000. Subtract $6,000 and $150,000 from the $200,000 loan amount. You have $44,000 cash to make a down payment on the new house.

    The Upside and Downside

    If you need to get out of your old home and mortgage quickly, a bridge loan can be a lifesaver because it can raise the cash to buy the home you want before another buyer beats you to it. However, bridge loans can be expensive. In the example above, the cost is $6,000 plus the interest that accrues until the loan is paid off. Bridge loans also carry risk. Your existing home is collateral and can be foreclosed on if the loan isn t paid. That can happen if the property doesn t sell before the bridge loan comes due or if the housing market turns sour and you are unable to sell for enough to pay off the bridge loan.


    Bridge Loan Calculator, bridge loan.#Bridge #loan


    Bridge Loan Calculator

    Bridge loans are most commonly reserved for real estate financing though they don’t have to be. A bridge loan is usually a short term loan that provide funds for purchasing an asset (such as a home) when the cash-on-hand along with the primary loan is not enough to pay for the asset.

    For example, if you currently have $50,000 cash and a home that you are selling for $400,000 for which there is a balance on the mortgage of $200,000 and you plan to buy a home for $800,000, you might be a candidate for a bridge loan.

    If the lending institution for the new mortgage requires that you put a deposit of 20% down, $160,000, at closing, you will not have the cash if the closing has not taken place on your current home. This is where a bridge loan can be used.

    -$50,000 cash on hand

    -$640,000 mortgage available

    $110,000 covered by bridge loan

    The new home mortgage will be $640,000 (800,000 – 160,000 = 640,000). The selling price less the cash on hand and the mortgage money available leaves a short of $110,000. This is the amount covered by the bridge loan. A bridge loan is typically an interest only loan. This means you make only interest payments. The loan is also usually a short term loan offered at a higher interest rate. The idea is that once the first property is sold, the bridge loan will be paid off immediately from the $200,000 net proceeds from the sale of the first house.

    That’s the background. This calculator will calculate your total payment for the primary new mortgage and the interest only bridge loan payment. The bridge loan has no term for it is due when the closing occurs on the first house. The only thing you have to know about the bridge loan is the annual rate of interest you’ll be charged.

    Anticipated Bridge Loan Term? (#) Enter number of months you anticipate needing a bridge loan. That is, how many months you think it will be until you close on the property you are selling. This value does not impact the bridge loan amount. It impacts the payment schedule and charts.

    This calculator makes these assumptions:

    1) payment for both loans are made monthly

    2) the bridge loan is an interest only loan (payments never go toward principal)

    Bridge loan