Bridge Loan Rates
Many of the CRE investors rely on Bridge loans to get the funds they need quickly. However, these short-term loans often have higher interest rates. It’s important to understand the nuances of bridge loan rates for making informed decisions.
Bridge Loans have higher interest rates compared to their longer-term counterparts, due to the increased risks undertaken by Bridge lenders.
As of the latest data, Bridge loan rates hover between 9.5%-12%, depending on various factors such as asset type, location, and specific loan terms. Bridge loans, associated with vacant land parcels typically lean towards the higher end of this range, approximately 12%. Moreover, a higher loan-to-value ratio often correlates with an elevated interest rate.
The rationale between these variations lies in the inherent risk associated with lending for undeveloped land parcels. Unlike, those existing structures or buildings, undeveloped land does not generate income, which can be a risk for lenders.
There are certain scenarios in a Bridge Loan wherein add a favorable consideration. For instance, individuals boosting a favorable debt-to-income ratio or a notable track record in commercial real estate investments may qualify for bridge loans at more favorable terms. However, it’s important to note that high-interest rates are customary within the realm of bridge financing.
In conclusion, when navigating bridge loans, it’s important to assess the associated interest rates and consider their unique financial circumstances to make decisions aligned with your long-term goals.
It’s always best to consult with a lender that specializes in commercial real estate lending. With the fast closing rate as long as 2 weeks, you can get your funds in just 48 hours! Century Capital will be here to provide you with the best services. To know everything about Century Capital Reach Victor Cohen at 201-880-7850 ext 102 or send an email at victor@centurycapitalfinance.com
