There are many reasons to purchase a second property, however, many folks find it difficult to finance. That doesn’t mean it’s impossible, it doesn’t even have to be that hard. Bridge financing is a special finance option that can help you finance the purchase of a second home with ease, whether you’re in Vancouver, Surrey, Langley, or elsewhere in the Lower Mainland. Here’s what you need to know about bridge financing and how it can help you buy a second property.
What is Bridge Financing?
A bridge loan is a short-term mortgage that can be used to literally bridge the gap between an old mortgage and a new one. For example, say you live in Vancouver currently. With the COVID-19 pandemic going on and many continuing to work from home, you decide to move to the interior of BC as you no longer need to be in the city. Say your current Vancouver home is for sale, and you want to buy a new one in Kelowna before your house sells. Most people wouldn’t be able to take on another mortgage before selling their original home. That’s where bridge financing comes in.
When you take out a bridge loan, you’re essentially taking out a short-term mortgage to finance the purchase of a second home. By the time your original house sells and you settle up on your old mortgage, you’re free to focus on the loan for your new home.
How Does it Work
Bridge loans are financed against the equity of your current home. This makes them relatively easy to qualify for. All you need to do is use the equity of your current home to back the financing for your second home. It’s easy, especially when your bridge loan is with Silver Hill Mortgage!
The process itself is refreshingly straightforward, and you won’t be stuck waiting for months from a bank. Bridge loans give people the freedom to purchase additional properties without the hassle of a bank loan.
What are the Advantages of Bridge Financing?
Bridge loans have a lot of advantages, especially for individuals and families that are trying to swing the purchase of a second home in BC. One of the most compelling advantages of bridge financing is the expediency it affords. Without a bridge loan, you’d have to put all of your possessions in storage until your house sells and you qualify for a new mortgage with a bank to purchase your next home.
When you take out a bridge loan, you won’t have to put anything in storage or wait around in limbo - you’ll be free to move into a new home of your choice.
Another key advantage is the fact that bridge financing is extremely accessible because you can use the equity of your current property as collateral.
Finally, bridge loans offer security and flexibility. If you try taking on a new mortgage for a second home when you already owe $250,000 on your current property, your odds of qualifying for another $250,000+ for that second home are pretty slim when you work with a bank. Bridge financing makes it possible to get the second home of your dreams without having to make any compromises.
Silver Hill Mortgage Corp.
If you’re looking to buy a second home and you’re worried about how to finance it, Silver Hill Mortgage is here to help. We understand the challenges of buying a second property, we also know how to help people overcome those challenges and achieve their goals.
Have a question or want to discuss your options further? Give Jim a call for a friendly chat at 604.620.2697.
Silver Hill Blog
Jim Horvath is the principal broker and director of Silver Hill Mortgage Corp., arranging mortgage loans for over 25 years.