Private Money Mortgage Loans: How Does a Bridge Loan Work?

Darrin Seppinni
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how does a bridge loan work

Lower Costs for Real Estate Investors: How Does a Bridge Loan Work?

In a nutshell, bridge loans are highly flexible, private money mortgage loans that enable real estate investors to borrow against the equity in existing real estate investments to buy a new property, renovate an old one or even take on a fix-and-flip project.  Sounds great, but how does a bridge loan work?

Before I get to all the ins and outs, here’s a little background.

Real estate investors have often struggled to find financing options — especially on higher-priced purchases. Not only have traditionally available options been expensive, but they’ve also been inconsistent and unreliable, making it difficult for investors to build significant wealth.

Fortunately, an uptick in private money real estate investment funds is set to change all that. With these new options, real estate investors have both a consistent financing solution they can rely on and one that doesn’t break the bank in the process.

Now don’t confuse these with smaller private money lenders, who often run out of money, have higher rates and require you to jump through hoops at every turn. This is a new marketplace, where investors have access to jumbo-size private money capital with lower costs, no red tape, and lightning-fast funding.   

Ideal for high-balance, short-term cash-out bridge loans, these funds are poised to change the way modern real estate investors operate for the long haul.

Bridge Loan Definition - What is it?

Let’s face it: Real estate investors are always in need of quick cash. Whether it’s to capitalize on a once-in-a-blue-moon opportunity or to rehab a rental property in need of repair, fast financing is key to making your business work.

Bridge loans offer just that, letting you borrow against the equity in your existing real estate investments to buy a new property, renovate an old one or even take on a fix-and-flip project — all with little red tape. Highly flexible, these bridge loans don’t have the rigid requirements that traditional mortgage loans do. Even some private money lenders have more conditions than the new lenders backed by these huge real estate investment funds.

In the end, this lack of bureaucracy means private money bridge loans can have big benefits for investors — particularly when it comes to speed. Once these loans are approved, they’re typically funded within just a few days, giving investors access to the quick and easy cash they need to stay afloat or take that next plunge.

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How to Qualify for a Bridge Loan

Because bridge loans are backed by designated real estate investment funds, you’ll need to have some experience in the arena in order to qualify for a bridge loan.

Generally, lenders will look at:

  • How long you’ve been buying and selling real estate
  • Your credit
  • Your total liquid assets.

They’ll also take into account the type, condition and location of the property you’re looking to buy or refinance.

Before using a private money bridge loan to fund your investments, make sure you have an exit strategy. Bridge loans generally last from 1 to 2 years, at which point you’ll need to refinance into a less expensive, longer-term loan or pay off the property in full. Take steps to ensure you’ll be in a position to do one of these options successfully.

Bridge Loans for Real Estate Investors: The Bottom Line

If you’re in need of quick cash to purchase a new property, rehab one that needs some TLC or make repairs on a rental, then one of these newly available jumbo cash-out bridge loans can be hugely helpful. 

Ready to Get Started?

Are you considering hard money or private money loans to finance your next investment purchase?

At HomeLife Mortgage, we offer private money mortgage loan financing up to $5 million on single-family residential properties of 1-4 units. Loan terms range from 1 to 2 years and are not eligible on land or ground-up construction. Interest rates range from 8.5 to 9.5% and are based on property condition, loan-to-value ratio, investing experience and credit. Origination fees include 1.5 to 2% of the loan cost, plus a $795 underwriting fee and $750 document fee.

Want to learn more or get started on your financing? Get in touch with one of our loan officers today.

Get your private money loan!

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Real Estate Investment Loans for a Rental Property - No Income Documentation


Click the live chat window on our site or call (888) 677-2526.  Our team is ready to assist you!

About HomeLife Mortgage

For more than 25 years, HomeLife Mortgage has built a strong reputation in California and Florida as a leading mortgage broker, servicing the needs of borrowers who have been unable to obtain conventional financing.  HomeLife Mortgage is at the forefront of non-bank lending offering the next generation of mortgages including Jumbo Non-Prime Loans, Real Estate Investor Loans, Bank Statement Loans, Non-Warrantable Condo Mortgages and Foreign National Mortgages.

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