RE/MAX Escarpment
Languages
Specialties
Buyers, Condominiums, Downsizing, First Time Buyers, First Time Sellers, Investments, Luxury Homes, New Construction, Power of Sale, Residential, Sellers
Locations
Ancaster, Beamsville, Binbrook, Burlington, Downtown Hamilton, Dundas, Flamborough, Grimsby, Hamilton, Hamilton Mountain, Smithville, Stoney Creek, Waterdown, Central Hamilton, East Hamilton, West Hamilton
May 25, 2022
When Closing Dates on your Home Purchase and the Sale of your Home DO NOT align.
When I mention bridge financing to people they almost always have the same reaction, "Why would I bridge when I can line up my closing dates and save myself all that time and expense?"
So often once I explain the reasons why Client's should bridge they realize that it is, in fact, the best way to do business.
Bridge financing basically allows you to (in reality) own two properties at the same time for a set amount of time. Let's say, for instance, that you buy your dream house and it's set to close April 1st. My suggestion would be to close the sale of your home on April 20th. Therefore during the period from April 1st through to April 20th you actually own and have access to both properties. Here are a few things about bridge financing that will explain why I'm such a huge advocate.
Properties don't always close when they are supposed to. Imagine being ready to sign over your property and then the Seller of the home you're purchasing can't close on time...for whatever reason. Now we have a big problem. Where are you sleeping that night?
Trying to pack everything from one house and get it all into another all on the same day is possible, but not pleasant.
The day you chose to move may end up being a horrible day weather wise and you'll wish (believe me) that you could choose another day.
Having access to your new home in advance will allow you to do any renovations, paintings or project before you move in.
Bridge financing is inexpensive. Typically there is an origination fee and a per diem (per day) interest calculation.
All that your Bank or Mortgage Broker requires to build a bridge are two (your purchase and your sale) firm deals. So in realty, it's not that onerous to arrange.
When I think about it, it's been a long time since one of our Seller's did a mirror close (closed the purchase and the sale on the same day). That's because of the reasons listed above in large part. I do remember, vividly, the last Client that didn't bridge though. He assured me the day after close that he'd never do that again...
-Abby