Borrowers seeking a bridge loan generally have one thing in common: They need cash fast to complete a real estate transaction.
As the name implies, bridge loans “bridge the gap” during a transitional period. This may mean between a sale and purchase, while a borrower builds a home, or many other scenarios.
Since bridge loans are used mainly for time-sensitive, tight situations, borrowers want to know how quickly they can secure this funding for their unique needs.
Read on to learn how bridge loans work, whether your scenario could use one, and how long it takes to get bridge loan approval from a hard money lender. Marquee Funding Group can often approve a bridge loan scenario over the phone. Sometimes as fast as 1 minute.
What is a bridge loan?
Bridge loans are a type of quick, short-term funding that both homeowners and businesses can use in real estate transactions or as a source of capital.
Homeowners are often faced with timing challenges when selling their home or purchasing a new one, especially if they need to make a fast move for a new job or other opportunity.
A bridge loan can allow them the time to complete these transactions and move forward seamlessly.
Why some lenders don’t offer bridge loans
Many borrowers are unaware of bridge loans because traditional lenders such as banks often don’t offer this loan type. And if they do, it comes with a hefty list of requirements that can be difficult for the average borrower to fulfill.
These requirements and conditions can include:
- Excellent credit
- Strict income and debt requirements
- May need to have 20% equity in your current property
To these lenders, bridge loans are seen as high risk, and they need strong proof that a borrower can fulfill the loan obligations.
As a result, these borrowers may find themselves in a tough spot between a sale and purchase, without access to an alternative source of funding.
What’s your loan scenario?
Private money lenders provide more bridge loan approvals
Fortunately, there’s an alternative source for bridge loans: private money lenders.
This type of lender is focused on the overall merits of the deal and whether it makes sense, because they don’t have to fulfill certain requirements.
Some of the biggest cons of bridge loans from traditional lenders include the rates and terms associated with this type of loan, and the equity and credit requirements.
With a hard money lender, the requirements are flexible, and the rates and terms are not significant enough to outweigh the greater benefit of being able to move forward with your time-sensitive goals. Private lenders like Marquee Funding Group can use any singular real property or combination of properties to help get borrowers the leverage they require for their bridge loan needs.
Let’s take a look at some common scenarios that could benefit from a hard money bridge loan.
Which types of lending scenarios might require a bridge loan?
Unlike other, more specific loans, a bridge loan is helpful for multiple types of buyers.
Bridge loans are most often used by homeowners and investors to secure a property prior to selling their existing property.
This allows the borrower to purchase a property without contingencies, which is a major bonus to sellers.
Borrowers also can make a 20% down payment to avoid private mortgage insurance (PMI).
Bridge loans also give a borrower the funds to move forward when they otherwise may be stuck somewhere waiting for their home to sell, which could happen if a borrower needs to move quickly for a new job.
Building a new home
Bridge loans can be used while a borrower is building a new home but still needs a place to live in the meantime.
In addition to using bridge loans to purchase properties, business owners can use these short-term funds for business expenses while they wait for longer-term financing.
How long does a bridge loan take to process?
Getting a bridge loan through a traditional lender is a long and complicated process that can take weeks, and many lenders don’t even offer this type of loan.
Instead, many experienced borrowers choose to get a bridge loan through a hard money lender.
Hard money lenders can provide same-day bridge loan approval, with closings in a matter of days.
Not all hard money lenders are the same
Most people shop around for a traditional lender, and with hard money lending, it should be the same way.
Not all hard money lenders are the same. However, the best ones are interested in building real relationships with borrowers for years of great deals.
These lenders are able to be flexible and fast because they have the experience and expertise to back up their decisions.
Marquee Funding Group can help you get a bridge loan
Marquee Funding Group is the ethical standard for hard money lending.
We are an experienced team of real estate investors that funds all types of loans in the consumer and commercial marketplace — including bridge loans.
With a common-sense, no-nonsense approach to lending, we handle all types of lending scenarios, from the simplest to even the most complex situations.
If you have been turned away by traditional lenders in your search for a bridge loan, we can help. Let us hear your loan scenario so we can get you fast bridge loan approval.
Our team understands the need to keep your real estate deals moving along quickly and smoothly.
We offer the following:
- Same-day approvals
- Closing in as fast as 7 days
- Loan amounts from $50,000 to $20 million
- No income documentation for bridge loans when bona fide exit strategy can be verified.