For several different investment situations, both residential and commercial in nature, the bridge loan is enormously beneficial to investors. Whether you’re attempting to purchase a home or investment property before selling your current one or dealing with any related situation that might make traditional loans less prudent, bridge loans are often the primary alternative available and can be approved much more quickly.

At RushFire Private Lending, we’re proud to offer both residential and commercial bridge loans to our investor clients, providing the temporary financing they need to address any cash flow issues for their properties. Our hard money bridge loans range up to $750,000, with competitive rates and terms.  Extensions are often possible, if needed. Why might a bridge loan be the right choice for your needs, and when is the right time to consider one? Let’s go over this plus some other important details about bridge loans to be aware of.

Bridge Loan Basics

As we touched on above, a bridge loan is a loan type that allows for temporary financing when investors or even residential buyers are in between properties. We all wish we could simply sell a current property before purchasing a new one, but such transactions aren’t always so simple and clean – there are often in-between periods that have to be navigated, and this can be particularly frustrating for property owners and investors in periods of tight real estate markets such as the one we’re experiencing now.

The bridge loan is here as the solution. If you’re waiting for your current house to sell but must move forward with the purchase of a new one, a bridge loan allows this to happen. In other cases, you might be waiting on long-term financing for a new build or an investment of some kind – again, the bridge loan is often enormously valuable here. Speak to our staff about specific rates and borrowing amounts you can obtain.

How Hard Money Lenders Help

There are certain situations where traditional loan formats aren’t really robust enough to meet the needs of buyers and investors, and the ones we described above often fit this description. In many cases, traditional lenders are not able to approve loans for the purchase of a new property while there’s any existing mortgage on your previous property.

However, hard money lenders like us fit right into this void. We make the process of obtaining a bridge loan far easier, providing them based on common sense and collateral rather than the kind of detailed, to-the-letter documentation that’s required in a typical financing situation. You only need limited income documentation – rather, we focus on the value of the property in question and the equity you’ll have or will build into it. This makes the whole setup far easier for many investors, both in the residential and commercial space.

Common Timing for Bridge Loans

When is the right time to consider applying for and utilizing a bridge loan? As we’ve noted above, these can be used in both business and residential settings depending on the need. Here are some situations where they’re often used within both these realms:

• Businesses and corporations: Companies may use bridge loans as a way of covering a short-term interim period of time while long-term financing is being obtained for their real estate. Bridge loans often cover the time between purchasing a property and selling the existing one.
• Individual Investor buyers: Whether we’re talking about wholesale investors or flip investors looking to make the best financial decisions, bridge loans are generally a legitimate option to use to help keep your business moving forward, as we’ve gone over above. You might be having trouble selling your current investment, or could be working on a new home construction project that requires you to maintain possession of the current home while the new home is being built, but still requires your funds for the build.

Loan Requirements and Lenders

As we noted above, it’s typically much harder to obtain a bridge loan from a traditional lender – though it’s not impossible, to be clear. That said, the terms might be very different than you’d see from us, and there are numerous settings where this is simply very inconvenient for the you as the borrower.

By just focusing on your ability to make the payments there will be cases where you’re required to fully pay off your existing mortgage at the closing of the bridge loan, which doesn’t work for many buyers. Some traditional lenders will require that you spend most of your cash as large balloon payments up-front or on the back end. There will also often be other terms of their loans that are not favorable which often puts borrowers in a very difficult position and makes it harder to complete your deal.

With a hard money lender, on the other hand, this is a much easier process without all the hoops to jump through. Not only are details like income documentation far less important, but hard money lenders also offer beneficial services like short approval timeframes, faster closing and underwriting based on asset and your equity in it, not some of the typical thresholds traditional lenders often require. For those in need of a bridge loan, using a hard money lender is almost always a simpler and easier process.

Choosing an Ideal Hard Money Lender

Now, not all hard money lenders are created equal. It’s important to evaluate your options and go with a reputable, experienced hard money lender like ours at RushFire, who make lending decisions based on common sense and deal merits while assisting our clients in a professional manner. We welcome inquiries about our past work, reviews or other signifiers of our excellent reputation as a hard money lender in Salt Lake City.

For more on bridge loans and why hard money lenders are the way to go for them, or to learn about any of our hard money lender services, speak to the staff at RushFire Private Lending today.