Finance
A 'bridge loan' in real estate is typically used when:
AA buyer is purchasing a property near a bridge or waterway
BA borrower needs short-term financing to bridge the gap between selling their current home and purchasing a new one✓ Correct
CA lender needs to bridge the difference between the appraised value and the purchase price
DA commercial developer needs to fund the gap between equity and first mortgage financing
Explanation
A bridge loan is short-term financing used to 'bridge' the gap between a buyer's need for funds on the new purchase and the sale proceeds from their current home. It is secured by the current home's equity and typically repaid when that home sells. Bridge loans carry higher interest rates due to their short-term, high-risk nature.
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