What Is Bridge Financing?
Bridge financing is a short-term loan that helps you “bridge” the gap between the sale of your current home and the purchase of your new one. It’s common in Ontario’s fast- moving housing market where closing dates don’t always line up.
When Does It Make Sense?
- Buying Before Selling: If you find your dream home before your current home sells.
- Closing Date Gaps: When the sale of your old property closes after the purchase of your new one.
- Renovations Before Moving In: Access equity to complete upgrades before moving.
How It Works
Bridge loans are usually interest-only and repaid once your existing home sells and closes. They are meant as short-term solutions, not long-term financing.
Key Considerations
- You’ll need a firm sale agreement on your existing home.
- Rates are typically higher than regular mortgage rates.
- Not all lenders offer bridge financing, so it’s important to work with an agent who has multiple lender connections.
The Bottom Line
Bridge financing provides flexibility when buying and selling don’t align perfectly. I’ll help you explore whether it’s the right solution for your situation.
