Bridge loan process?

[Mary Ann Shlim]

What's the process like? Looking for advice from actual borrowers and lenders specifally Bridgeloan or similiar products. 

[Eric Loya]

@Mary Ann Shlim Hi Mary! Through my career in real estate, I've been both the borrower for these types of loans, as well as the lender.

In regards to the process, it's actually a lot easier than trying to obtain a traditional mortgage. Since these loans are typically short term and higher interest, I'd recommend having an exit strategy in place (sell or refinance) when securing this type of financing. 

Here's how I would break down the process:

1) Discuss Your Situation w/ Lender (i.e. looking to purchase/rehab/sell property, cash out refi, or bridge a purchase that cannot go conventional)

2) Discover Lending Parameters (3 primary questions to ask)

- what is the range of interest rates (typically 7-13%)

- what are the origination fees and out of pocket expenses (typically 2-5%)

- how are LTV's calculated - is it based on purchase price or resale value (lenders are usually 65-75% of resale value) - also, some lenders have max LTV on purchase price, include/exclude rehab costs, so that's important to note as well

3) Get a Few Quotes

Most lenders can move quickly on closing (5-14 days), as this is primarily an asset based loan - meaning not many times will the lender request tax returns or income statements. 

I hope this sheds some light for you! Let me know if you have any other questions as we do provide this type of financing in Illinois.