Bridge Loans in Dewey Beach, DE
Short-term financing to bridge the gap between property purchase and permanent financing.
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Financing for Bridge Loans
Contact us today to discuss your bridge loans project in Dewey Beach and learn more about our specialized financing solutions.
Frequently Asked Questions
How is a bridge loan different from a traditional mortgage?
Bridge loans differ from traditional mortgages in several key aspects: term length (6-24 months versus 15-30 years), interest rates (higher to reflect short-term risk and speed), qualification focus (property value and exit strategy rather than income and credit), closing speed (7-14 days versus 30-60 days), and repayment structure (interest-only versus principal and interest). Bridge loans serve temporary needs with clear payoff sources, while traditional mortgages provide long-term financing.
What is a typical bridge loan term?
Bridge loan terms typically range from 6 to 24 months depending on the exit strategy and property type. Residential bridge loans for buy-before-sell situations often have 6-12 month terms. Commercial and investment property bridge loans may extend to 18-24 months for more complex transitions or value-add projects. Extensions are usually available if needed, though terms may adjust for extended timelines.
Can I get a bridge loan with bad credit?
Yes, bridge loans focus primarily on property value and exit strategy rather than credit scores. While good credit may secure better rates, borrowers with credit challenges can often qualify for bridge financing when they have sufficient equity and clear payoff plans. The short-term nature of bridge loans and property collateral reduce credit risk concerns compared to long-term financing.
What are typical costs for a bridge loan?
Bridge loan costs include interest rates typically 10-13%, origination points of 2-4%, and standard closing costs including title insurance, appraisal, and legal fees. There are usually no prepayment penalties, allowing payoff when permanent financing closes or properties sell. While costs exceed traditional mortgages, the speed, flexibility, and short-term nature make bridge loans cost-effective for appropriate situations.
What happens if I can't sell or refinance by the end of the bridge loan term?
If your exit strategy takes longer than anticipated, most bridge lenders offer extension options, typically for additional fees or rate adjustments. Communication with your lender is essential if you anticipate delays. Some lenders may work with you to modify loan terms or arrange alternative financing if market conditions change significantly. Maintaining open dialogue and demonstrating continued progress toward payoff helps secure favorable extension terms.
Other Property Types
Residential Real Estate
Hard money loans for single-family homes, condos, and residential investment properties.
Commercial Real Estate
Financing for office buildings, retail spaces, industrial properties, and commercial investments.
Investment Properties
Loans for rental properties, income-producing assets, and portfolio-building investments.