Bridging Loan Basics Jonesboro GA

A Bridging Loan is a short-term loan used as a way to provide funding for the purchase of a new property while the borrower awaits the sale of an existing property.

Local Companies

A & A Financial Services Inc
(404) 761-1696
3420 Norman Berry Dr
Atlanta, GA
A Plus Financial Services LLC
(404) 363-1702
3825 Jonesboro Rd Se
Atlanta, GA
Taylor Bean and Whitaker
404-454-3658
6707 MANCHA STREET
COLLEGE PARK, GA
Georgia Federal Credit Union - Lithonia
770-987-1040
2695 Panola Roard
Lithonia, GA
RBC Centura Bank
770-413-3600
7231 Rockbridge Road
Lithonia, GA
Washington Mutual Bank - Lithonia
678-418-2506
3007 Panola Road
Lithonia, GA
Wealth & Wisdom Resource Group
678-526-9300
6860 Main Street
Lithonia, GA
Time Finance
(404) 577-3650
41 Marietta St NW
Atlanta, GA
1st Infinity Tax Services
(404) 880-4667
235 Peachtree St
Atlanta, GA
Gateway Mortgage Group
678-432-3001
2002 Hwy 42 N
McDonough, GA

A Bridging Loan or “Bridging Finance” as it is also commonly known, makes such transactions possible. They keep the borrower from getting stuck in a rough financial corner, which typically means being forced to pay two mortgages at the same time. Bridging Loans can be used either for commercial or personal reasons.

Short term in nature, the application process for a Bridging Loan is similar to that of a standard loan. Most importantly, it’s advisable to work with a lender that is experienced with this type of loan. Plus, as the need for a Bridging Loan often arises with little advance notice, being pre-approved for such a loan is a smart move.

Bridging Loans are usually interest only meaning that the borrower pays only the interest on the loan each month. The borrower continues with this repayment plan until the property the loan is being used for is sold. When the sale finally does occur, the proceeds of that sale are used to repay the principal. The principal payment typically is in the form of a one-time, lump-sum payment.

The lender need not be too concerned about default because the borrower is required to put up collateral to secure the loan. This is typically in the form of another piece of property. But rest assured the lender will still thoroughly review the credit history of the applicant, the business and any partners or others with an ownership interest to assess the level of risk it is undertaking. Poor credit however need not be an obstacle.

The interest rate on a Bridging Loan is based on several key factors: the potential risk associated with the loan, the current interest rates and a premium added by the lender. As Bridging Loans are short-term, generally not longer than two years, and in most cases only a metter of months, the lender has only a short time to make a profit on the deal. The profit is derived from the interest rate.

Expect to pay a higher rate of interest for a Bridging Loan. And remember, the monthly payments are generally interest only. You should also expect to pay off the Bridging Loan in full, usually as a one time payment, as soon as the property is sold.

In the off chance that the property is not sold before the Bridging Loan matures, it can usually be converted to a conventional loan without a payment penalty. But as ever you should not assume this is the case and be sure to check with your lender that this is an option if circumstances call for it.

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Featured Local Company

A & A Financial Services Inc

(404) 761-1696
3420 Norman Berry Dr
Atlanta, GA

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