The time frame for obtaining approval and funding for a bridge loan for real estate depends primarily on the type of bridge loan lender and on the property used to secure the loan.
Conventional lenders such as banks and credit unions may offer bridge loans, but they prefer loans with longer terms and a longer profit horizon. Conventional bridge loan lenders require multiple home loan application forms and other documentation that extends the application approval process. These conventional lenders will also verify the borrower’s credit score before approving the loan and determining loan terms such as interest rate and closing costs.
For such lenders, a time frame of 30 to 45 days for approval and funding is typical.
The borrower must have enough home equity in their current home to cover the loan amount they need for their prospective new property. If all is clear, then nimble online lenders that specialize in bridge loans and other short-term loans can provide real estate bridge loan approval and funding more quickly. You can get both a commercial bridge loan and a residential bridge loan for respective residential and commercial real estate properties. Both of which come with their own timelines for the approval and receipt of funding.
Timeline for a Home Purchase
Many online bridge loan lenders offer same-day approvals for loan requests. Government funding requirements for owner-occupied bridge loans increase the minimum funding period to at least two weeks, which is usually sufficient for most homeowners. Once homeowners receive the money, they can immediately put a significant down payment on their new home or even buy it outright.
Timeline for an Investment Property
A bridge loan that will be used to buy an investment property, like a bridge loan for flipping houses, can receive funding more quickly than any other source of bridge loan financing since it’s subject to fewer federal regulations. The lender can usually approve these loans quickly, provided that the borrower’s equity in the collateral property meets the bridge loan lender’s risk standards. For such bridge loans, the bridge lender can often provide funding within three to five days of loan approval.
If you’re wondering how long it takes to get a bridge loan, there are a few considerations to make. Talk to a financial advisor to learn everything you need to know about bridge loans before you decide if it’s the best option for your needs.