Bourne, Jenkins & Mulligan

June 25, 2007
Bridge Financing

What is Bridge Financing?
Bridge Financing is borrowing from your bank to complete the purchase of your residence before the closing of the sale of your existing residence.

What will the Bank Require?
Your bank will require a copy of your Agreement of Purchase and Sale and an assignment of the proceeds from your sale. We can assist you with all necessary documents.

Why is Bridge Financing Recommended?
You can complete the purchase of your new home and begin the process obtaining possession and moving in by completing your purchase ahead of time. Without Bridge Financing you will not be able to take possession until your sale is completed. This might be late in the day. If your buyers have difficulty with financing on their sale the transaction could be delayed for a day of two. You may incur additional costs for moving, storage and accommodation.

What is the cost of Bridge Financing?
Most banks will offer bridge financing to existing customers for a set fee, plus a daily rate of interest on the amount borrowed. Check with your bank for actual costs.

What are the Risks?
Bridge Financing allows you to complete your purchase and avoid a breach of contract if your sale is delayed. However you will own two houses until your sale is complete. If your buyer causes a delay in your sale they may be liable to you for any costs associated with the delay. The lawyers at Bourne, Jenkins & Mulligan would be happy to discuss your agreements and bridge financing benefits.

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