Real Estate

Bridge Financing?

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  • Mar 4th, 2022 8:54 pm
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[OP]
Sr. Member
User avatar
Jun 10, 2016
503 posts
384 upvotes
Brampton

Bridge Financing?

Hoping I can get some clarity/opinions on this situation:

Planning on buying a condo first, then selling my house (which I'm confident will sell quickly in this market).

Assuming the price I buy at and sell at are approximately the same. No mortgages involved. Hoping to coordinate dates so I don't need any bridge financing, but if I can't pull that off and need to bridge a few days or weeks between closing, I've been looking into bridge financing options.

Spoken to two different banks that I deal with and each gave a different option:

Bank A - they said its not a bridge loan, but they would be putting a mortgage on current property to draw equity out, need appraisal of current home, they advance the amount on new home and loan is paid out when sold

Bank B - they would put a line of credit on the new condo and bridge anything extra on the old house, paid off upon sale

So basically I'm wondering is one of these preferable over the other? Obviously both have interest and fees associated with them which seem to be roughly equal, wondering if there are other things I should be thinking about or asking or looking out for??

Thanks in advance!
4 replies
Deal Addict
Mar 22, 2010
3816 posts
1738 upvotes
I would just do the bridge loan if you are not too keen on fees. I would image the difference would be minimal. I just don't like getting appraisal involved. Another party means more time line and risk of something that I am not aware of.
Deal Addict
Jan 13, 2014
2566 posts
1681 upvotes
Calgary
Bridge financing involves mortgages on both properties. in this case the best thing would be to go with option A. use proceeds to buy the condo and then payout.

or you can just get a mortgage on the condo at 20% down with a variable mortgage, and pay it out when the deal closes. the problem is the time line, if your house sells first then option B or really just a cash deal, if your house doesnt sell right away then option A.
[OP]
Sr. Member
User avatar
Jun 10, 2016
503 posts
384 upvotes
Brampton
just seeing these responses now (didn't get notifications for some reason) - more to think about - thanks!

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