Finance
What is a 'bridge loan' in Rhode Island real estate?
AA government loan program for infrastructure near bridges
BA short-term loan that bridges the gap between the purchase of a new property and the sale of an existing property✓ Correct
CA loan secured by commercial properties near waterways
DA federally guaranteed loan for first-time buyers
Explanation
A bridge loan is a short-term financing tool used by buyers who need to purchase a new property before selling their current home. It provides temporary financing until the existing property is sold and the proceeds can pay off the bridge loan.
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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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