All About Bridge Loans
Keywords: bridging-finance, bridge-loan, commercial-loan, commercial-lender, risks
What is a “bridge loan?” Certainly, it is not a loan for buying a bridge. It gets its name from a frequently used type of financial strategy. Properly used, it can be a decided help in achieving financial goals. Improperly used, it can be a financial disaster.
By definition, a “bridge loan” is a short-term loan used to purchase commercial property. This is something that can come in very handy, depending on the particular situation. There are two main points that you need to consider before you opt for a bridge loan. One is your needs and the other is the state of the property market.
One of the major benefits of bridge loans is that it will allow you to purchase a new property before you have sold your existing one. You will need to evaluate your current situation to determine if your needs justify taking on this type of finance. Some major questions you must field in your evaluation are:
Will you lose the new property if you can’t offer a deposit?
Would you be eligible for a discount on the purchase price if you can come up with the cash fast?
What are the existing market conditions in regard to the sale of your existing property?
Would it be possible to sell your existing property in the time frame set out in your finance package?
Most bridge loans typically run for one year and will need to be paid in full at the end of the term unless it is possible to convert it into a commercial loan. Also, interest rates will be higher on a bridging finance package.
If you do not have an urgent need for the new property and the market is slow, it may not be in the best interest of your business to take on this type of loan. On the other hand if the property market conditions are good, you can get out from under a bridging loan quickly. . However, you must realize that a bridge loan has serious risks. It is still something that will need to make sense for your business.
If you feel taking on this type of loan is the right thing to do, you will be far better off going through a specialist commercial lender. This lending institution will shorten the entire process. A lending specialist will know the market and he/she can quickly make a judgment on the best loan for you, based on your particular circumstances. It would do you no good at all if you have worked out a bridge loan package only to find out the loan underwriters have rejected the application.
Be sure to check that the loan can be converted into a conventional commercial finance package. You will also want to check on the type of interest rate and the costs you will entail if you do have to convert.
Most commercial lenders will be willing to extend the terms of your bridging finance package. If you have a buyer and you are waiting for the sale to close, a bridge loan is much more flexible and accommodating than you might expect.
Repaying your bridge loan at the end of the loan term more often than not depends on your ability to sell your existing property. If your property does not sell in the required time frame, you will be paying the existing loan on your current property, your new property and the newly converted bridge loan as well.
If you believe this may be a possibility, be sure to take a package that can be converted to a commercial loan if the need arises. Otherwise, you may have to come up with the full loan sum at the end of the finance term. As I cited earlier, bridge loans can be a decided help for your business, but there are risks. Let the borrower beware !
Bob Carper is a veteran consultant in information systems He holds a a MBA from Pitt. For additional information go to
www.secure-webconference.citymax.com. His blogsite is www.html-secrets.net You may also contact him at robertcarper06@comcast,net
Previous Articles Highlighter:
Budget Planning For Youngsters (1)
And credit cards are one of the factors that add to the novelty of life on campus. That is why more and more colleges are taking it upon themselves to teach their students about the various aspects associated with credit cards.
What Is A Secured Loan? (2)
It might be a certain amount of cash, a home that you own, a car that you own, stocks, or bonds. It might also be a less traditional type of item such as a piece of expensive artwork, jewelry, a thorough bred horse.
Student Loan Consolidation Information - What Is The FFELP - Federal Family Education Loan Program (3)
Chiefly, all the services need a FAFSA (Free Application for Student Aid) application to be filled out, the data provided forms the core information that allows loan officers to make their funding decision, typically those decision makers are employed through the individual college at which the student is accepted, the financial aid department will make a suggestion for a package based in part on the EFC (Expected Financial Contribution) of the student and his or her parent(s), analyzing income they aim to supplement any unmet need with combinations of subsidized and unsubsidized Stafford loans and other sources.
College Student Credit Card Debt. Tips For Parents (4)
As soon as you get to campus, you'll probably get a notice regarding it, but if you haven't, check the university web pages, and if there is an information center, inquire there.
Retirement Tax Planning Tips (5)
Devising an estate plan that reduces or eliminates federal estate taxes on your retirement or IRA benefits. Making a charitable beneficiary designation that will eliminate taxes on retirement or IRA benefits.
Five Ways To Secure Online Financial Information (6)
Information to learn how to hack, invade your privacy, and acquire financial information is easily available on the internet. More and more devious individuals around the world are catching on to this easy access to your wallet.
Why Is Credit Important For Your Federal And Private Student Loans? (7)
Good credit will bail you out again and again as we saw here. Most importantly is that it sets a mindset that will last with you for the rest of your life.
Student Loan Consolidation Information - What Is The William D Ford Direct Loan Plan (8)
More concrete differences between the two products do exist, though since FFELP loans are funded and serviced by private financial institutions who you sign a promissory note and could possibly not be who you re-pay the loan to, it is a basic practice for lenders to re-sell loans to other businesses, mortgage companies have been doing this all the time, you may have gone to the trouble to discover a lender and their services you like, you could have decided over and above the rate and repayment terms preferring their customer service and then for example finding the loan has been sold to another business, you may now be repaying the loan to a company you rejected, however in the situation of Direct loans since the Federal government is the lender the loans are not sold to any third party.
Mortgage Refinance-The Easy Way To Get The Adjustable Rate Monkey Off Your Back (9)
Keywords: refinance, mortgage refinance, adjustable rate mortgage, refinance loan The biggest benefit to refinancing your house is that it allows you to get a lower interest rate resulting in you paying less money per month than you currently do.
Consumers 'Worried' At Thought Of Base Rate Rises (10)
Some 38 per cent of males do not take any notice of upcoming rate changes, in comparison to less than a quarter of females. ICM's study also showed that twice as many women (14 per cent) as men have grave worries about base rate rises.
You Can Get Loans For Wanderlust (11)
It is not easy to go and apply for leave. Unless we have a week of paid leaves coming our way, several people are not eager to put in that leave application without some egging on.
Parents 'Increasingly Contributing Towards Children's Property Costs' (12)
Overall, the typical first-time buyer property was reported to currently cost 162,055 pounds. And despite only 18 per cent of first-time buyers having asked, or are intending to ask, their mums and dads for assistance, expectations of providing help are putting parents under financial pressure.
Car Buyers 'Need To Choose Suitable Finance Product' (13)
In addition, Halifax revealed that of all the used cars currently on British roads, some 25 per cent are less than three years old, with roughly the same figure made between three and six years ago.
Financial Freedom Not Reached Until Mid 50's (14)
Meanwhile, consumers in Scotland are intimated as being the most financially independent as a fifth of over-50s in the country are providing financial help to their grown-up children. The study showed that people from the region are the most likely to have paid off their mortgage in their 50s, with 80 per cent said to have done so.
British Consumers 'Uninformed' About Personal Finance (15)
"Quite worrying given we selected questions that we felt everyone with a bank account should know." Following the research, Abbey has also released a list of the top five questions that stumped those that took the tests.
Of Jargon And Finance Tips (16)
All you have to do is fill out an application form and wait for the bank's representatives to get in touch with you. It really is as simple as that.
Secrets To Avoid A Home Foreclosure (17)
That is pay yourself first... Others help you develop a prosperity consciousness for free at the abundance site, www.wealthvibes.com. While there check out all the free positive affirmations videos.
Borrowing For A Business Venture (18)
In the initial years it will require constant attention. As the years go by, you will have to nurture and sustain it. Your aim should be making it self-reliant within the span of a few years.
Getting Your House Ready For The Appraiser (19)
Keywords: refinance loans, release home equity, loans Getting the house ready for the appraiser is a big thing in the life of every mortgage seeker. Getting a mortgage or a remortgage requires not only a long line of documents, but also a visit from the appraiser.
Insurance For The Four Legged Folks (20)
Insurance is also a great way of saving up money that might otherwise have gotten wasted. Choosing the right insurance matters a lot for this will be a long term investment, unless you decide to go and get a different insurance provider.
Newer Articles Highlighter:
Employer Health Insurance Covers Fewer Employees Today (1)
-Provide a payroll stuffer that demonstrates costs sharing or total employer cost. -During annual review periods ensure the employee understands the costs of employee benefits and note that the employer portion represents effectively additional income.
Checking Out New Communities And New Home Builders In Cherokee County (2)
If the community is well into the development stage, ask for a personal tour so that you can get a feel for the layout and the "personality" of the neighborhood.
Some Great Options - When Purchasing New Construction (3)
As was the case in years now gone by, development along waterfronts continues to a notable element of the overall new home construction in the region. Because of the prime nature of this real estate, more often than not such properties do come with a noticeable price tag.
Why People Live In Gated Communities (4)
Because development companies make preserving that beauty a priority, residents in communities like Lake Arrowhead and Laurel Canyon can choose homes and home sites that make the most of the stunning natural beauty of the North Georgia countryside.
Custom Homes In Atlanta - Choosing A Builder (5)
Take the time to find out about your prospective builders' reputation, professionalism and quality of work before making a final decision. One of the best ways to learn about a builder is through the work that they've done.
Talking Business With New Home Builders In Cherokee County (6)
Are there variations on the fixtures and appliances? How much will the upgrades that you want cost? 4. Does the company have a design team to help you coordinate the finished look of your home?
The Top Golf Course Communities In America: What Makes Them So Special? (7)
Homes that are larger and include things like private pools, home spas, and marble countertops can raise the value of the entire community. The neighborhoods that have houses built with care and value in mind are those that are seen as the top communities.
Why Every Business Owner Needs To Own A Small Business Credit Card (8)
Credit cards are good things to have and you never know when you may not have cash handy. Your computer stuff could crash and you might need a new computer and other stuff as well the credit card wont leave you hanging.
Student Loan Consolidation Information - Differences Between Graduate & Undergraduate Financial Aid (9)
In recent times a new option has become available to graduate students, the PLUS loans though the acronym stands for (Parent Loans for Undergraduate Students), they're now a means for a range of grad students, in the undergraduate situation parents are the borrowers and are responsible for the re-payment, in the case of grad students he or she become the responsible person.
How To Reduce The Cost Of Car Insurance For Teenagers (10)
Shop Around You always want to make sure that you shop around and compare and contrast between various different companies. You will be incredibly surprised at the differences in prices from one company to another, and so you should never just go with the first company that you buy, because if you take a bit of time and shop around you can find way better deals on car insurance for teenagers.
Trading Commodities - Technical Analysis - Expectancy (11)
Too many people overlook this very important tool, and it can help you become a winner. Visit www.123onlinetrading.com to find more great information about commodity trading. Besides a large selection of free educational articles you can also find powerful books about online trading in general.
Debt Consolidation Solution - Easy Steps To Making A Plan To Deal With Your Debt Problems (12)
Since not all institutions or organisations report to the credit bureaus, there is a chance that your credit report does not include all your creditors and lenders, use recent invoices, bills and statements to include any debts that were not covered in your credit report.
How To Set Your Priorities When Choosing A New Credit Card (13)
Take the introductory 0% APR deals. They may sound great to you if you have a balance you'd like to transfer over, but for someone who isn't going to be carrying a balance, who cares?
Waleska New Homes Are Going Up (14)
Building your new home here gives you many different options. Investors also have great opportunities to help develop these communities, too. For either one, homes in the Atlanta region are currently increasing in value and many communities are simultaneously being developed.
Introducing Edgewater - One Of The Best Galveston County Neighborhoods (15)
There will be a town center with a commercial district for residents to make use of as both a source of much needed shopping and entertainment as well as a source of employment.
Where Are The Best Places To Live In Texas? (16)
Happily, in order get on any list claiming that a community is one of the best neighborhoods in Texas, it has to be in at least one of the better rated school districts.
Edgewater Is One Of The Best Places To Live In Texas (17)
This community is not one that has sprung up over time and is therefore disorganized and a little confused - instead it is a master-planned community, with diverse homes all tied together with a single architectural theme, carefully planned streets and utilities to minimize traffic and maximize appearance and efficiency, and plenty of amenities, all centralized within the community for great access for all residents.
The Facts About Poor Credit Secured Loans (18)
In many cases it is usual for a four or five month repayment holiday to be arranged right at the start of the term. Shopping around can be worthwhile but can take a long time; going to a specialist broker gives you access to hundreds of these lenders while saving you the time and the legwork.
New Home Features In The Top Homes To Live In Galveston County (19)
For example, if you won't consider a home that doesn't have a pool, but that on your "needs" list. Common things found on the "needs" list include minimum number of bedrooms, minimum number of bathrooms, off-street parking, short commute to work, and so forth.
Choose A Custom Home In Edgewater (20)
These trails all lead back to the 35 acre nature reserve that runs along Clear Creek, making it easy to spend hours getting back in touch with the wilds of Texas before returning home again relaxed and refreshed.