Thinking of Taking Out a Bridge Loan? Here's What You Need to Know First
A bridge loan is a short-term loan used to finance commercial real estate purchases. Real estate development funding is typically used to fill the gap between when a property is purchased and when traditional long-term financing is obtained. Commercial real estate bridge loan lenders usually offer real estate bridge loan loans , although some conventional lenders offer them. Bridge loans for a commercial real estate typically have terms of six months to three years, although some can extend for five years or longer. Interest rates will vary depending on the lender but are typically higher than rates for traditional loans because they are short-term and considered higher risk. Before taking out a bridge loan, it's important to understand how they work and the pros and cons. Read on to learn more. How Bridge Loans Work? Real estate development funding is typically used by investors looking to buy a property quickly before they have secured traditional financing. T...