What is Bridge Loan?

Definition

A mortgage loan is a short term loan with the expectation that the borrower will obtain permanent financing.

What It Means

The objective is to cover an interim period before a more permanent financing can take place. For example, a borrower may obtain a bridge loan while moving from one house to another. In that case, the bridge loan would be obtained for the new home with the expectation that the proceeds from the sale of the existing home would pay off the bridge loan.

Other Names

Swing Loan

Related Terms

Construction Loan: A mortgage loan that is extended to borrowers that seek to construct a building on a vacant land and is secured by vacant land and proposed improvemen... Read More
Hard Money Loan: A mortgage loan that is offered by private investors or non-banking organizations and which is primarily underwritten against the property.... Read More
Private Money Loan: A mortgage loan that is offered by private investors or non-banking organizations and which is extended based on the personal relationship with the bo... Read More
Subprime Loan: Subprime loan is a mortgage loan that is offered to borrowers with significant default risk.... Read More

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