What is a residential bridge loan?
I just used a bridge loan. In January I closed on my new home and did not wish to even put my old house on the market until after we moved out and painted and re-carpeted. I could have gotten a first and second lien on my new home then paid off the second lien when the first home sold- but the fees would have been very high. Instead I got a bridge loan. It was a short term (nine month) loan on the old house that allowed me to close on the new house. The fees were lower but the interest rate was high (9%). I figured this was ok because it was short term. I had to make intrest only payments for the two months until I paid it off. I am very happy. The banker told me that if the old house was still unsold at the end of nine months we could renew the loan for another nine months- thank goodness we didn’t have to.
