A Bridge Loan is a short-term loan, often less than a year, used to bridge a borrower from one property to another.
WHAT EXACTLY IS A BRIDGE LOAN? It seems that the term is used quite often for all kinds of different loans...
A Bridge Loan is a short-term loan, generally less than a year, used to bridge a borrower from one property to another. Using a “Bridge Loan” allows you to purchase a new property before you close or sell your existing property. Rubicon can provide a “Bridge Loan” within 10 business days. Now you can act quickly to stabilize and secure the property you want while presenting a much stronger, faster close that also enables you to negotiate better pricing.
Rubicon is highly experienced in Bridge Loans. We allow borrowers to competitively make an offer on a new property before the close or sale of their current property. In doing so, the buyer can compete on equal footing with all cash offers.
What makes Rubicon Mortgage Fund
different from conventional lenders?
Rubicon does not require appraisals or credit checks and is solely asset-based. Rubicon has experience financing both simple and complex transactions and works diligently to find a solution to fit the Borrowers’ needs. In many real estate transactions, timing is a crucial factor. Rubicon can offer a letter of intent within 24 hours and can typically finance a bridge loan in as little as 10 business days.
How a Bridge Loan is Structured:
Bridge Loans allow Borrowers to purchase their new property before selling their existing property. By using a bridge loan, Borrowers will use their existing property as additional collateral to make an extremely competitive offer, and possibly even purchase the new property with no down payment. Rubicon can offer up to a 60% Loan using the combined value of the 2 properties, subject to Rubicon’s internal valuation.
Bridge loans can provide Flexibility
Bridge Loans enable Borrowers to make aggressive offers on their purchase, to buy before they sell, while giving them more flexibility on their timeframe to relocate. The ideal scenario is when there is liquidity in the existing property and Borrowers prefer the option to reduce the cash to purchase before selling. A Bridge Loan can also be a useful tool for an Investor or Borrower looking to relocate to a different submarket. This type of loan can additionally give clients the opportunity to improve the existing property as an attempt to get top dollar on the sale, after purchase of the new property, also eliminating the necessity to find a rental in the interim.
How a Bridge Loan is paid off:
Upon sale of the existing property, most of the proceeds payoff the loan with Rubicon, and any existing debt can be refinanced through a conventional lender. Bridge loans can also used on reverse 1031 exchanges, where the replacement property is purchased using the relinquished property as additional collateral. Rubicon works directly with the 1031 Accommodator to facilitate this.