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A Florida bridge loan is interim financing for an individual
or business until permanent or the next stage of financing
can be obtained. Money from the new financing is generally
used to "take out" (i.e. to pay back) the Florida
bridge loan, as well as other capitalization needs.
Florida bridge loans are typically more expensive than
conventional financing because of a higher interest rate,
points and other costs that are amortized over a shorter period,
and various fees. To compensate for the additional risk the
lender may require cross-collateralization and a lower loan-to-value
ratio.
Florida bridge loan interest rates are usually 12-15%, with
typical terms of up to 3 years. 2-4 points may be charged.
Loan-to-value ratios generally do not exceed 65% for commercial
properties, or 80% for residential properties, based on appraised
value.
There are two types of bridge loans. With the first,
you borrow the money to pay off your existing mortgage and
enough to make your desired down payment on your new home.
You're usually not required to make monthly payments on your
bridge loan. Instead, you make only the monthly mortgage payment
on your new home, and when your old home sells you use the
proceeds to pay back all the accrued interest and the outstanding
balance on the bridge loan.
With the second type of bridge loan you keep your current
mortgage, but borrow against the equity in your current home
and use that money as the down payment on your new home.
Most banks do not offer Florida real estate bridge loans
because the speculative nature, risk, lack of full documentation.
A bank that issued Florida bridge loans might have difficulty
justifying its lending practice to its investors and government
regulators.
Florida bridge loans are more likely to come from individuals,
investment pools, and businesses that make a practice of the
higher-interest loans.
Florida bridge loan programs can give borrowers a
fresh start and let them get back on track to repairing their
damaged credit, while also allowing them to keep their home.
Florida Bridge Loan Specialists
- 1st Bridge
- Principal Commercial
- Lending Well
- Best Rate Loans
- The Commercial Loan
- Capital Source
- Madison Realty Capital
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