As a mortgage broker in Toronto with years of experience, we can help our clients navigate different situations. For example, people who need a lot of money quickly might want to take a look at a bridge gap loan.
These are short-term financing options that are offered by many major lenders as well as some private lending companies. Generally, the duration of the entire loan is six months to two years but this varies. These can be from 90 days to one year long as well.
The banks generally charge interest rates of 2% or 3%. Private lenders on the other hand can charge 7% to 12% with additional fees.
Your Mortgage Broker In Toronto Explains How These Work
It’s best to have a good credit rating so you can show lenders that you’ll be able to pay a bridge loan back. One of the only requirements is a sale agreement for your current residence and a purchase agreement for the new home you’re buying.
If you have a low credit score, it’s possible to apply for one of these loans from private lenders.
These loans are intended to pay off your primary mortgage when there are additional debts that are owed. Some lenders ask for monthly payments while others look for an end term or lump sum amount at the conclusion.
There are several different types of people who apply for these loans including:
- homeowners who want to secure the purchase of a new property before they list their current house.
- Other people who can’t afford a down payment without selling their current property first.
There are a few other requirements a mortgage broker in Toronto wants you to be aware of. Traditional lenders and banks, for example, require a concrete selling date.
