A loan bridge is a type special of the loan to the one which appeals when is a need immediate of financing. Has temporary character, specifically until obtains the loan definite, as long as the debtor ensures an unrealized income. That is, is a financing short-duration that happens between the processing of two long-term loans- why not?
Although a loan bridge can request for business ends, your aim more frequent is that one to be able to acquire a new housing without the obligation of sell in an immediate way the actual. For this reason, is a common advert to him as a “mortgage bridge”. When contract this loan type, usually make up in one only the mortgage of the housing that wants sell and the loan bridge that destines to defray the entrance of the new real estate.
Ways to pay the loan bridge
When requests a loan bridge for finance the purchase of a new house without having sold the housing that possesses, the debtor has a term of two to five years, according to conditions of the financial institution, for sell the real estate. Whereas of the mortgage payments the principal more the interests, as is usual, during the years of loan life bridge your fees can pay of three ways different:
- Fee with a grace period for repayment of principal: only pay the interest of the outstanding obligation pending capital of refund.
- Fee special reduced: pay a fee lower than the one which pays when sells out the current housing. In spite of this, the majority of the contributed money every month destines to pay the interests of the loan bridge.
- Normal subscription amortizes the capital more the interests.
Advantages of the loan bridge
The main advantage of this kind of loans is that allows the borrower to sell your housing without hurries. As said, is usually that the term that offers the banking organization for sell the housing is of two to five years, a margin enough for not “malvenderla” for a price of less than the one which can achieve with something of patience. Moreover, although in this period have two mechanisms of financing, what is usual is that the debtor chooses to pay only the interests, that is the fee with a grace period for repayment of principal, of the loan bridge. So that for that matter only be returning one of the credits.
Disadvantages of the loan bridge
Five years to sell a house seems enough time, but in the real estate market, the uncertainties are to the agenda. Precisely, the main disadvantage of this product appears if the borrower is not able to sell the housing initial before the prescribed time with the banking organization. If once terminated the period of lack not has formalized the sale of the real estate, have to return the total of the loan, that is, the principal more the interests, which entails a higher risk level than in mortgages fixed, variables or mixed. For avoid that this happens, is recommendable ask for this type of financing in moments of economic growth or of stability of the real estate market.
The loans bridge are a product financial that involves major risk for the company that another loan type as can be those ones of the consumption, so usually ask for requirements stricter for your granting. This translates, usually, in which the applicant owes prove a greater capacity of solvency or skills to comply with the incurred obligations long-term.