A bridge loan is a short-term loan used to purchase or refinance a property quicakly in order to take advantage of a short-term opportunity, accommodate an urgent closing, or bridge the gap until permanent financing is available. Bridge loans close much faster than term loans or conventional loans because there’s less guidelines, therefore there is less underwriting and documentation needed.
Bridge loans are temporary loans, the typical property bridge loan has a term of 12-24 months, although many bridge lenders will grant the owner the option to extend his loan for six months to one year. This type of financing is secured by the real estate asset itself.
Like a typical bridge Loan, which is a short term loan, the same structure and outline can be utilized on commercial properties in a commercial bridge loan except that terms are longer here. This type of loan can also be a valuable tool for purchase or refinance of office buildings, hotels, retail property, and multifamily housing including apartment complexes.