Bridge loan

Bridge loan

A bridge loan is the short term source of funds needed to pay for purchase of new property when you have not yet sold your previous property. Thus a bridge loan is taken out to supplement this shortfall in cash reserves for a downpayment. To qualify for this, the borrower must have a contract to sell the exisitng house. It is also known as the swing loan. Bridge loans are not used very often now as the second mortgage lenders lending at high value loans are increasing and sellers prefer offers from buyers who have already sold theri property.