Finance
What is a 'bridge loan' and when might a Pennsylvania homeowner use one?
AA long-term mortgage for purchasing property near a bridge or waterway
BA short-term loan secured by the buyer's current home to provide funds for a down payment on a new home before the current home sells✓ Correct
CA Pennsylvania PHFA loan product for buyers in flood-prone areas near river crossings
DA construction loan used to bridge the gap between permit approval and construction start
Explanation
A bridge loan is a short-term loan, typically secured by the borrower's current home, that provides temporary financing — often for the down payment on a new home — before the current home is sold. Bridge loans allow Pennsylvania homeowners to purchase their next home without waiting to sell their current one, eliminating the need for a home sale contingency. They carry higher interest rates due to their short-term nature and the risk of carrying two properties. Bridge loans are typically repaid when the existing home sells.
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