Bridge loans, gap loans, swing loans?

dbaker · Joined: 21 May 2007 Posts: 4 2.18 Dollars($)

Is there really any difference between the terms, or is it just industry slang?

sagarthakar · Joined: 15 May 2007 Posts: 68 25.93 Dollars($)

Bridge loans, gap loans, swing loans : They are all same or their purpose is same just the names are different. Basically the loan term is very short in such products For Ex : 6,9,12 Months.

Best Example : Flagstar Bank has a Loan program of 6,9,10,12 Month known as Bridge Loan Financing.

Regards

Sagar

helping_user · Posted: Mon Jun 18, 2007 12:30 am Post subject: RE: Bridge loan vs gap loan

Hi Dbaker,

As far as I know, bridge loans and swing loans are one and the same. Bridge loan is a short term financing option which helps you to borrow against your home equity. You can use it for the down payment on a new home.

Gap loans are financing options that help you to fill up the difference between the initial funding of a construction loan and the entire amount of permanent loan.

Say for example, a developer arranges for a mortgage worth $2 million against an apartment which is 80% occupied. From the time of construction till the 80% occupancy state is reached, the loan amount is worth $170000. So, there is a deficit of $30000 which the developer makes up for by taking out a gap loan for a time period during which the occupancy increases from 80% to 100%.

Thanks.

dbaker · Joined: 21 May 2007 Posts: 4 2.18 Dollars($)

Thanks for the replies!

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