Bridge /Interim Financing is a loan made to facilitate the purchase of your home prior to the sale of your existing home where you plan on using the sale proceeds from your existing home to complete the purchase of your new home.
For example, the possession date for your new home is July 10 and the sale of your existing home does not close until July 15. Your new home needs to be paid for on July 10 but the funds from the sale of your existing home won’t be available until July 15. So, your lender may give you a 5 day loan so that you can pay for your new house on July 10. The loan will be paid out on July 15 when you receive the sale proceeds from the sale of your existing home.
If you are selling and buying a property and your purchase transaction closes before your sale you will need a Bridge Loan or Interim Financing. If Possession Date is the same date for both transactions, I would also recommend a Bridge Loan or Interim Financing. It is possible your sale may be delayed and you won’t be able to close your purchase.
Discuss your Bridge Loan or Interim Financing options with your mortgage lender.
