Do you need cash to payoff a large expense, and have restricted access to credit? Have you recently been let down by a bank?
If so, you should consider working with a private mortgage lender who can offer you a personalized short term financing solution or bridge loan to help you regain control of your finances.
What is a Bridge Loan?
A bridge loan is a short term mortgage solution from a private mortgage lender for credit constrained Canadians who are looking for financial help to deal with a specific debt or credit issue. Bridge loans are a great option for those who have been rejected by banks and other large financial institutions.
How does it Work?
A bridge loan is a temporary financial tool that will help you improve your credit to later gain approval for a lower rate mortgage. A typical bridge loan scenario might look something like this:
Step 1: Rejection from a bank
Bridge loans are great for those who have been rejected by a bank because of bad credit or other reasons.
Step 2: Work with a Private Lender
To cover your immediate financing needs, you can obtain a mortgage loan from a private lender. You’ll then spend 6 months to a year making your loan payments on time. This will allow you to build your creditworthiness to later obtain financing from a B-lender, A-lender or bank and reduce your cost of borrowing.
Step 3: Get a Mortgage from a B-Lender
With an improved credit history you will be able to refinance your mortgage loan with a B-lender, typically with a much lower interest rate. Again you’ll work to improve your credit further with the goal of gaining approval from a bank/A-lender in the future.
Step 4: Finally, Get a Mortgage from a Bank
The final step and the main goal of a bridge loan is to improve your credit enough so that you can get a loan from a bank at an even lower interest rate.
When Can a Bridge Loan Work for you?
Mortgages from private lenders, in the form of bridge loans and short term mortgage financing, are commonly used tools for a variety of different circumstances. These can include (but are not limited to):
- Loan Rejections. If you continue to be rejected by your bank because of credit issues, a bridge loan will help you work to correct those issues while still getting the money you need.
- Late Payments, 60 Day Notice and Notice of Default. A bridge loan can help you clear your debts and work towards a brighter financial future.
- Unpaid Income Tax Bills. If you’ve received a tax bill from Canada Revenue Agency (CRA) or Revenu Québec and don’t have the money to cover it, get in contact with us as soon as possible.
- Business Owners. Are you a business owner that’s having trouble getting the financing you need? You can obtain alternative forms of financing by leveraging your property, often at rates lower than typical business loans.
- Debt Consolidation. A bridge loan is a great way to consolidate any high interest credit card debt or personal debt you might have – while building a stronger credit history.
- Consumer Proposals. If you’re currently in the process or have already filed for a consumer proposal, a private mortgage lender can work with your trustee to shorten your payment period.
- Mortgages. If you currently have a lien on your home because of specific debt issues consider discussing a customized mortgage solution with a private lender.
Want More Information?
If you think a bridge loan, short term mortgage financing or a mortgage from a private lender might be a good solution for your current situation, then submit a request to speak with a private mortgage specialist today. Applying is easy, fast and free.