Bridge loan....

patty_cakesApril 25, 2006

What is a bridge loan and how does it 'work'? TIA

patty_cakes

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joyfulguy

patty cakes,

Don't tell me that you've been out buying bridges, again!

One doesn't happen to link New York with Brooklyn, by chance, does it?

I think that a bridge loan is one that you get to buy a "new" home, to be carried until you get the "old" one sold and the account settled, at which time you pay off (well, most of) the loan.

If I'm worng - some one will be coming along to tell you the facts.

ole joyful

    Bookmark   April 25, 2006 at 8:01PM
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patty_cakes

LOL OJFG(how old is *old*?) actually there was this huge river in Death Valley, and I 'bought stock' in the bridge. LOL I've also been burning a few bridges behind me!LOL

I'm trying to find this out for a friend who will be putting her home on the market in the next couple of months, but in the meantime, has found a Victorian 'she just can't stop thinking about'. Your explanation sounds logical. ;o)

patty_cakes

patty_cakes

    Bookmark   April 25, 2006 at 8:34PM
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joyfulguy

77 ...

... and enjoying it - despite the negative stuff that I write here, from time to time.

A lady whom I respect, Jane Jacobs, a renowned city planner who wrote a book something like, "The Life and Death of American Cities" that for a number of years has become more or less a text for students in that field, who recently wrote a book, "Dark Age Ahead", died yesterday.

A couple of weeks and she'd have been 90.

Someone said that, though she's been in ill health for a couple of years, a while ago she was to speak, came on stage with a walker, but when she started to talk, the voice was strong and the brain as sharp as ever.

A humble, inquisitive woman.

Who never attended University.

But - she learned new things. Every day.

And rejoiced in life.

Recently, while travelling with a friend, in a discussion about, among many other things, death, she said that she regretted that she wouldn't be here to see how things turned out.

o j

    Bookmark   April 25, 2006 at 8:49PM
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steve_o

Joyful's got it right. It's a loan secured by future possession of collateral. We used one between buying one house and selling another. Worked fine and didn't cost much.

    Bookmark   April 26, 2006 at 9:21AM
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brickeyee

"It's a loan secured by future possession of collateral."

No, most bridge loans are secured by the old house to get to settlement on the new house.
Whan the old house is sold the bridge is discharged.
They wirk nicely if you cannot get settlemnt dates to line up, but they come with a price. Typically 1 point is paid, even if the bridge loan is only used for a few weeks or months. This makes the APR look very high.

    Bookmark   April 27, 2006 at 3:00AM
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steve_o

Oops -- thanks for the correction. I assumed when we got ours that it was the new house securing it. Learned something today...

    Bookmark   April 27, 2006 at 8:31AM
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joyfulguy

What might be the possibility of shifting the bridge loan to become a mortgage on the new house, then using it to invest, rather than paying that rather hefty fee?

Of course, then it is no longer a temporary loan and one would have to go through all the rigmarole associated with one o' them mortgage critters.

o j

    Bookmark   April 28, 2006 at 1:01AM
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