Bridge Financing

Here are some important points regarding bridge financing:

• There must be a firm sale agreement on your existing home no later then three weeks prior to the closing date of your new home purchase
• There is a $250 set up fee charged by the lender
• The interest rate is Prime +5%
• Your lawyer may charge additional legal fees to assist with bridge financing
• An appraisal may be necessary, at your expense, on your existing property
• The bridge will be for the lower amount of either:
  • the equity available, after all sale costs, from your existing home or,
  • the down payment required for the new home
• The lender cannot lend you more than the equity available, after sale costs, from your existing property
• If you require renovation funds on closing of the new property, for example for renovations, the funds cannot be added to the bridge loan and you will have to pay for the expenses, such as renovations, with your own funds
• The closing costs on your new purchase have to be paid with your own funds on the closing date of the new purchase and cannot be worked into the bridge loan