What is Bridge Financing?

Bridge Financing is appropriate when you have sold your home with a closing date that is after the closing date of your purchase. In these circumstances your financial institution may make available to you the “equity” in your existing home so that you can use this equity to purchase your new home. You will repay the bank of trust company from the proceeds of the sale of your existing home. Banks will usually charge a “processing” or “set up” fee for the bridge financing. Of course, you will also have to pay interest on the amount borrowed for the few days between the closing of your purchase and the closing of your sale.