Mortgage Bridge FinancingHypothekenbrückenfinanzierung
In many respects, bridge lending follows exactly the same process as a mortgage and is often described as a "mortgage" in credit documentation. However, bridge credits show a number of significant and subtile differences: Bridge credits are usually granted for short-term needs, beginning at 1 date and up to a maximal length of 18 month (average 6/7 month).
Usually a mortgage is set up for a much longer duration, as most mortgage providers have a 5 year maturity. As a rule, a mortgage is granted on residential properties and cannot be used to purchase real estate. They can be backed up on a real estate object as an extra fee, such as a second or third fee, behind another fee already in place, such as a mortgage.
Mortgage rates are only agreed on a 1. fee-base. Unlike mortgage overdrafts, bridge credits usually do not need any payment on a regular subscription per month. Thus, demonstrating the accessibility standards required to obtain mortgage financing is not so relatively. Bridge credits are often paid back through the selling of the bond or other real estate.
For this reason, since refinancing is not the way out, bridge lending will often give a lender a perspective on lending that mortgage providers would never agree to. Bridge credits are usually agreed without exits charges, so that even if the maturity of the facility is set at 12 month, it can be reimbursed at any point during the life of the facility without penalty.
Mortgage financing is usually subject to a penalty if it is paid back within the original term. Bridge credits can be granted for 100% of the sale value of a property if other collateral can be used. Mortgage of 100% LTV are NOT LONGER available. In principle, bridge credits can be granted for any type of use, in particular for commercial use.
Hypothecary resources can only be borrowed for restricted and often non-uniform commercial use. Mortgage, especially private mortgage, is always organized in private name only. Bridge lending provides extremely high and minimal credit volumes. As a rule, bridge credits cannot have an age restriction.