Finance
In Montana, a 'bridge loan' is a type of financing that:
APermanently finances the purchase of a bridge or other infrastructure
BProvides short-term financing to bridge the gap between purchasing a new home and selling the current one✓ Correct
CIs a government loan for rural bridge access roads
DIs a loan that bridges the difference between list and sale price
Explanation
A bridge loan is a short-term loan that provides financing during the period between buying a new home and selling the existing home. It allows buyers to close on a new purchase before receiving proceeds from their current home sale.
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Key Terms to Know
Loan-to-Value Ratio (LTV)
The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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