| Let's face it. Finances can get really tight sometimes. It | | | | Personal Mortgage Bridge Loan Scenario |
| doesn't matter if you are an thriving individual or a | | | | Suppose you are buying a new house and to move |
| growing business. At some time or another, we will all | | | | into your new house you must first sell your old house. |
| run into the same sort of problem. Our savings will be | | | | Essentially, to make the move you must perform two |
| low, our cash flow dwindling, and we will still be in need | | | | separate transactions. First, you must sell your current |
| of making a financial move that can't wait. | | | | home. Second, you must close on your new home. |
| Mortgage Bridge Loans to the Rescue | | | | Ideally, you can complete these two transactions |
| For instance, an individual might be ready to move to a | | | | smoothly with little or no problems. However, unless |
| bigger house, but is confronted by the finance problem. | | | | you have a respectable amount of savings or a high |
| How do you space the gap between paying off your | | | | positive cash flow, you will likely need some extra |
| current mortgage, coming up with a down payment for | | | | cash to put down on your new home as you wait to |
| the new house and securing the mortgage on that | | | | close on your old home. |
| house as well? Obviously, you must take advantage | | | | In such a scenario, a mortgage bridge loan helps you |
| of some financial instrument to help you transition from | | | | cover this shortage of cash. Typically, a personal |
| the old mortgage to the new mortgage. A mortgage | | | | mortgage bridge loan is structured in one of two ways. |
| bridge loan provides the answer to your problem. | | | | It can either be used to pay off the old mortgage and |
| Many businesses face a similar problem. They are in | | | | sign for the new mortgage, or it can might be used to |
| desperate need of temporary or short term financing | | | | combine the old and the new debt into a single |
| so they can sell their commercial properties or | | | | mortgage. Either way it eliminates the cash flow issue |
| transition smoothly into a refinancing solution. Again, | | | | and allows you to move into your new home. |
| their problem is one of time. They need a quick, yet | | | | Business Mortgage Bridge Loan Scenario |
| short term answer to their financial concerns, and a | | | | Businesses constantly require financial assistance as |
| mortgage bridge loan provides just that. | | | | well. Suppose your business is looking to acquire some |
| Its like Crossing a River | | | | commercial properties, such as retail developments or |
| Have you ever had to cross a bridge to get from point | | | | business parks. Your commitment to theses properties |
| A to point B? Normally, a bridge is erected to help us | | | | is only temporary, thus you are not interested in a long |
| get through the terrain we might not otherwise be able | | | | term business mortgage loan. Rather, your interest in |
| to navigate by ourselves. Most of us can't drive | | | | these properties is as a short term investment and so |
| across rivers, bays, or lakes. We need assistance to | | | | you are in the market for short term lending. A |
| do so, and a physical bridge allows us to reach our | | | | mortgage bridge loan will then allow your business to |
| destination. A mortgage bridge loan works in much the | | | | acquire financing for a relatively short period of time, |
| same way. In this case however, the bridge that is built | | | | say 1 - 3 years, and you are free to sell the property |
| serves as a financial bridge, allowing us the flexibility | | | | when an acceptable bid is offered. |
| we need to get from one point in time to another point | | | | Conclusion |
| in time. In this sense then, a financial bridge spaces time, | | | | Mortgage bridge loans can assist almost any kind of |
| not water. | | | | customer, whether they are individual or a business. As |
| Now that we have a better understanding of what a | | | | a financial tool, these loans help bridge the gap of time |
| mortgage bridge loan is, let's examine a couple of | | | | created by other financial instruments. Each instrument |
| scenarios where a mortgage bridge loan might prove | | | | or tool has its place in the financial realm, and it is up to |
| beneficial. | | | | us to understand them and use them appropriately. |