What is a primary use case for a Bridge Loan?

A bridge loan is primarily used to assist buyers in transitioning between properties. This type of short-term financing is designed to bridge the gap when a buyer is in the process of selling one property while simultaneously purchasing another. It offers immediate cash flow to the buyer, allowing them to act quickly in a competitive real estate market without waiting for their current property to sell.

This financial tool is particularly useful in situations where timing is critical, such as when a buyer finds their ideal new home before selling their existing property. The bridge loan provides the necessary funds to acquire the new property, ensuring that the buyer does not miss out on the opportunity while they work to finalize the sale of their previous home. Once the original property is sold, the loan can be paid back, making this an effective transition tool in real estate transactions.