The cost of borrowing money is always changing, and the rates for short-term bridge loans and permanent financing are no exception. As of August 21, 2023, short-term bridge loan rates are ranging from 9.5% to 12%, depending on the asset, location, and loan terms. Permanent financing rates are currently lower than bridge loan rates, ranging from 5% to 7%.
Key Points
- Short-term bridge loan rates are ranging from 9.5% to 12%.
- Permanent financing rates are currently lower than bridge loan rates, ranging from 5% to 7%.
- The type of asset being financed, the location of the asset, the loan-to-value ratio, the borrower’s credit score, the borrower’s debt-to-income ratio, and the borrower’s experience in real estate investing can all affect the interest rate of a bridge loan.
- The type of property being financed, the location of the property, the borrower’s credit score, the borrower’s down payment, the borrower’s debt-to-income ratio, and the borrower’s experience in real estate investing can all affect the interest rate of permanent financing.
Conclusion
When considering a bridge loan or permanent financing, it is important to carefully weigh the pros and cons. Bridge loans can be a helpful way to bridge the gap between the purchase of a property and the sale of your existing property. However, they also come with higher interest rates and fees. It is important to make sure that you can afford the monthly payments before you take out a bridge loan.
