Finance
What is 'bridge loan' financing and when might a Hawaii buyer use one?
AA. A loan to purchase land adjacent to a bridge or road infrastructure
BB. Short-term financing allowing a buyer to purchase a new property before selling their existing one; useful in Hawaii when a buyer needs to act quickly in a competitive market without waiting to sell✓ Correct
CC. A loan provided by the Hawaii state government to bridge funding gaps in affordable housing
DD. A construction loan for building a bridge or waterway access on a Hawaii property
Explanation
A bridge loan is short-term financing (typically 6-12 months) that provides funds for a new purchase while waiting for an existing property to sell. In Hawaii's competitive market, buyers often cannot make contingent-on-sale offers—sellers prefer non-contingent buyers. A bridge loan allows buyers to act non-contingently, using equity in their current home as collateral. Bridge loans carry higher rates due to short term and perceived risk.
Related Hawaii Finance Questions
- Private Mortgage Insurance (PMI) is typically required on conventional loans when the loan-to-value ratio exceeds:
- In Hawaii, a 'home equity loan' differs from a HELOC because:
- What is 'secondary mortgage market' and why does it affect Hawaii home buyers?
- What is 'mortgage insurance premium' (MIP) on an FHA loan versus PMI on a conventional loan?
- What is 'seller financing' and when might it be used in a Hawaii real estate transaction?
- What is 'interest rate lock' and why is it important for Hawaii home buyers?
- What is 'pre-qualification' versus 'pre-approval' for a Hawaii mortgage and why does the distinction matter?
- Which federal law requires lenders to provide borrowers with a good faith estimate of closing costs and information about the settlement process for residential mortgage loans?
Practice More Hawaii Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Hawaii Quiz →