No matter how great of a financial acumen we have, there are times when we find ourselves in a monetary trench. Such scenarios become even more daunting when they involve property that we have to close a deal on, but cannot do so due to being short on funding.

That is where bridge loans come in.

What are Bridge Loans?

The term “bridge loan” is used to define a loan that is typically used to “bridge” the gap between real estate transactions. Bridge loans can apply to both residential and commercial properties, especially in scenarios where you are seeking funding to save your current property from unwanted actions such as foreclosure; or want to execute a deal on another property that could be imperative for your future growth, such as a new house or a commercial building for your business.

 

How Do They Differ From Other Loans?

Bridge Loans

Bridge loans differ from usual mortgages and loans due to their exceptional closing time. Typically, where other loans take more than 4-6 weeks at the very least to even provide a final answer to the borrower, bridge loans can easily close in a duration ranging from 2-4 weeks. Another aspect that makes them so beneficial for borrowers is their total duration. Where other mortgage based loans take between 5-30 years to complete, bridge loans can be as short term as 6 months, going up to 3 years.

This makes bridge loans one of the most viable financing options available to those who know how to use them. They not only sport a turnaround time that is short and swift, but with an amount that is significantly high and can help you close large real estate deals – all without having to repay your loan for decades to come.

 

How Can Bridge Loans Help You?

Due to their turnaround time, bridge loans can be a beneficial option in a number of scenarios. For instance, if you want to purchase a house but have not sold your current property, then instead of passing up on a good property, you can take out a loan from a bridge lender and place the down payment on the new house. Similarly, you can take out a bridge loan in situations where you may want to close on a commercial property without having to wait on your next business financing deal to come through.  In addition to the acquisition of new property, bridge loans can also help you save your own property from issues such as foreclosure.

Bridge loans are also helpful in securing funding where banks have also refused the borrower for their own reasons. Due to how bridge loans are funded by private money lenders, they do not follow the same restrictions as banks and can be approved with far more lenient requirements.

Why Bridge Loans Are Popular Between Private Money Lenders?

Since bridge loans are processed faster than bank loans and with more leniency, lenders make up for that through their interest rates, where they can start from 9 percent and go as high as 15 percent.

As mentioned above, instead of being funded by banks, bridge loans are typically funded by private money lenders, who are intent on using their financing to earn higher returns Borrowers agree to the terms of bridge loans easily due to their understandable method of operations, and thus make the market a lucrative one for private investors.

Where Can You Find Lenders Who Offer Bridge Loans?

Due to their popularity, finding private money lenders that could offer you bridge loans is getting easier each day. However, more providers also means that the quality of lending gets affected within these sectors, and that is where you need to ensure that you choose someone among private money lenders that cannot only provide bridge loans, but do so with reliability and credibility.

Montegra is one such financial group that does not only offer bridge loans to its customers, but also provides an array of financial services including those pertaining to both residential and commercial

loans. Operating as one of the most popular hard money lenders in Denver, Colorado, Montegra puts its clients first, and would there be able to help you with all of your bridge loans inquiries when you need it.