Definition of Bridge Loan:
Bridge Loan in Orange County:
A bridge loan is a short-term loan used until long-term financing is secured – many times this takes the form of hard-money or private money financing. This type of financing can typically be utilized for a period of 1 to 2 year and always have higher interest rates than a person could arrange through; Fannie Mae, Freddie Mac, FHA, or VA.
Here is an example: A bridge loan could be used to purchase another home before a buyer is able to sell their current home. Also, a qualified buyer could get an Orange County bridge loan to pay in cash up-front for a home at an auction. Then, they could follow-up immediately and secure a South Orange County mortgage loan to pay for the home over time – in this scenario it would be wise for the homeowner to get preapproved for the “take-out” financing prior to getting the Bridge Loan. Bridge loans are sometimes referred to as; Swing Loans or Interim Financing.