“If You Have a Real Estate Deal That Needs to Close, But Your Financing Has Fallen Through, a Short Term Bridge Loan is Likely The Answer”
Its not uncommon for mortgage financing to fall apart prior to the purchase being completed, leaving the buyer/borrower scrambling for money to close the deal.
This can be more common than you think and is probably the most common in condo market where a buyer can enter into a purchase agreement and get financing arranged years in advance of when the condo can actually be sold.
Over the time of condo construction, which can take three or four years in some cases, the buyer’s credit rating or level of earnings has eroded to the point that he or she no longer qualifies for the mortgage. Many times this is not discovered until the buyer is in the closing process, leaving very little time to find an alternative method to close the deal.
And the cost of not closing on time can be considerable. First, the buyer can lose their deposit that they paid years in advance to secure the purchase in the first place. Second, the seller can sue the buyer for breech of contract creating more cost and hassle.
The most challenging aspect of this whole scenario is that the buyer can literally have a couple of days to secure alternative financing. And while they may vary well be eligible, an institutional lender is not likely going to be of any help as they can’t move fast enough to accommodate the buyer’s requirements.
If time is literally of the essence where you may be down to your last 48 hours, a short term real estate bridge loan is likely going to be your best option to save the deal. Once in place, you can restart the process for looking for a lower cost institutional mortgage that will pay out the bridge loan when it is located and secured.
The key to getting a bridge loan in place in time is to know where to look for one. Most real estate bridge loans are provided through private mortgage lenders that place their money through mortgage brokers. So the key is to work with a mortgage broker that deals with these types of financing emergencies and has the types of funding sources readily available so funds can be arranged and advanced in the time available.
If you find yourself in similar circumstances to those described above, then give me a call today so I can quickly assess your requirements and lay out your options. I work with these types of requests all the time and have been successful in getting bridge loans in place in just a matter of a few days.
Click Here To Speak With Mortgage Broker Joe Walsh
