If you are buying one property in Los Angeles while you are in the process of selling another, you may need to “bridge” the financing gap with a short-term loan. For that purpose, you need a Los Angeles bridge loan, also known as a swing loan, interim financing, or gap financing. With a bridge loan, you borrow against the property you currently possess. This acts as collateral, providing you with the means to purchase the new property.
Benefits of Bridge Loans in Los Angeles
If you are in a situation where a bridge loan is appropriate, it can offer you an ideal financing solution. Following are some of the benefits of L.A. bridge loans:
- Bridge loans are short-term in nature. This means that you do not need to concern yourself with penalties, fees, and interest piling up over a long-time period. Once you complete the sale of your existing property, you should have the money to pay off the bridge loan in full.
- A bridge loan may help you save money and simplify a move. If you wait to finance a new home until after you sell your existing home, you will not be able to move in right away. This may leave you with a housing gap, which means you may need to spend extra money on temporary housing. A bridge loan allows you to move directly into your new residence, potentially saving you this money and streamlining your move.
- Repayment plans are flexible—and may even help you qualify for long-term financing. With a bridge loan, you can usually choose whether to pay off the short-term loan until before or after you secure long-term financing. If you do choose to pay it off early, it may give your credit a major boost. This may give you more options when it comes to long-term loans.
Still, bridge loans do carry risks. There is a chance your existing home will not sell when you expect it to. Bridge loans also can be expensive, and the qualification requirements tend to be quite strict.
Pacshores Mortgage Can Help You Apply for a Los Angeles Bridge Loan
At Pacshores Mortgage, we are standing by ready to assist you with a Los Angeles bridge loan. We can answer any questions you have, and help you assess the risks and benefits of a bridge loan for your situation. Our network of accredited bridge loan companies in Los Angeles is flexible and willing to accommodate homebuyers in a range of situations. Our long-standing relationships with the lenders in our networks also makes it possible for us to offer special discounted rates and low fees to our clients. Give us a call today at 310-478-5005 to get started.