A Hard Money Bridge Loan is a Quick But Temporary Loan Solution

 

A hard money bridge loan on commercial property is a short-term loan with a maturity period from two weeks to three years. The loan is typically used to "bridge the gap" prior to reaching longer-term financing arrangements with another financial institution. A hard money bridge loan is vital for a commercial property investor that needs to close on a property quickly or grab up properties that have gone into foreclosure. These loans are often needed by property developers that need to continue with a project while waiting for other aspects of the project to fall into place such as waiting for project revisions or legal permits to be approved.

 

A hard money bridge loan is issued by a private company or investor and it comes with a high interest rate due to the short-term nature of the loan. A low interest on a hard money bridge loan may be difficult to find due to the fact that usually no qualifying is required. Plenty of lenders offer hard money bridge loans for commercial purposes including retail, residential apartment complexes, offices, industrial and a variety of other commercial property types. Borrowers need to have an "exit strategy" in mind before obtaining a hard money bridge loan because refinancing in the near future is of the utmost importance.

 

 

Use a Hard Money Bridge Loan Mortgage Broker 

Try to find a good deal by enlisting the help of a mortgage broker who may be able to track down the best deal on interest rates as an experienced hard money bridge loan broker will have the best programs for most commercial property types and situations.

 

Look for mortgage broker who works with private lenders that control their own interest rates and who are more likely to offer a hard money bridge loan. These broker usually have a long term relationship with their lenders and  are more apt to pass on interest savings to the borrower. Keep in mind that most lenders will have a minimum loan amount, sometimes starting as high as one million dollars.

 

One of the problems with a hard money bridge loan is that the interest rates are constantly changing. Since this type of loan is needed on a spur of the moment basis, it can be impossible to predict the interest rate that you will end up paying until you actually apply for the loan.

 

Most lenders will analyze your financial needs and give you their current interest rates up front, but interest rates will usually be from 10% to 18% and higher on international transactions

Sometimes a lender is willing to waive the hard money bridge loan application fee if the borrower agrees to meet the lender in their corporate offices to show their commitment to the transaction. It may seem like a trivial amount in the grand scheme of things when considering a hard money bridge loan, but not having to pay an application fee is more money in your pocket.

 

Have an Exit Strategy For Your Hard Money Bridge Loan

 

Regardless of what your hard money bridge loan interest rate is, refinancing quickly could be the best thing to do as far as saving you money is concerned. Don`t wait until your hard money bridge loan term draws near, because it will come much sooner than later. Have your backup plan in place and start working on procuring that permanent financing the moment the hard money bridge loan funds are in hand.

 

Since hard money bridge loan lenders loan funds a loan based on the property equity, a borrower`s credit doesn`t have to be perfect. Bumping up that credit score, however, may work in your favor and get you a better interest rate when considering an exit strategy. To find out how much you could end up paying, utilize a mortgage calculator with precise interest rates and terms. This will give you an accurate idea of the payments you can expect.

 

A hard money bridge loan can be the solution to your immediate need for commercial real estate cash.