A bridge loan is a short-term financing solution used to bridge the gap between the termination of one loan and the commencement of another loan. Typically employed in real estate, bridge loans allow borrowers to meet liquidity requirements while awaiting long-term financing.
A floor loan is the minimum amount of money that a lender is willing to advance to a borrower during the initial stage of a financing agreement. It is commonly used in real estate development contexts for construction loans to manage risks until certain conditions are met.
A gap loan, also known as a bridge or swing loan, fills the difference between a floor loan and the full amount of a permanent loan, providing temporary financing until the borrower meets certain conditions necessary for permanent loan funding.
Secondary financing refers to an additional loan that is secured by a property that already has a primary loan (first mortgage) attached to it. This type of financing is often used to bridge financial gaps when purchasing or refinancing property.
A Swing Loan is a short-term loan that helps homeowners purchase a new residence before selling their existing property. Often used when homeowners need to secure a new home promptly, usually a few weeks to a few months. Check out related terms like Bridge Loan and Gap Loan.
