What Is Interim Financing?

It has become commonplace to buy and sell homes throughout one’s life. But the logistics of this process can actually be difficult. In order to obtain sufficient funds to purchase a new home, often a buyer will need the proceeds from selling their first home. But, selling their first home prior to buying their second home means they are without a residence for the space of time it takes to close. The result is a residency conundrum, forcing the buyer to either save enough for an additional down payment or rent for a span of several months. For this reason interim financing is available.

Lenders recognize the difficulty of this particular situation and are ready to help. Short-term loans designed to bridge the gap between homes are called an interim mortgage. The potential buyer of a new home can approach the lender and receive an amount equal to the amount of cash they will be receiving from the sale of their first home. The borrower puts this loan amount towards their second home, allowing them to move in immediately. Then, after the sale of their original home is complete, the received amount can be used to pay off the interim loan, converting the borrower’s position into a standard mortgage situation.

Apart from the residency dilemma, interim financing serves another purpose when attempting to purchase a home. If a buyer finds a perfect home at a competitive price, it is safe to say that the home will not be on the market for an extended period of time. If that same buyer knows that he/she is to receive financing after several more months of waiting, an interim loan can once again bridge the gap. The short term loan can give the buyer the opportunity to secure the home instead of risking the wait, and when the finances are available shortly thereafter, the buyer repays the loan and once again has a standard mortgage situation.

Mortgage lenders find interim financing to be advantageous to them as well. There is usually a loan fee, ranging from $250 to $700. Additionally, the interim loan is completely separate from the first or second houses’ mortgages, and so it has its own interest rate. This interest rate is usually higher than the final mortgage’s rate will be, but because of the limited amount of time that the loan is active, the additional cost is minimal to the borrower. Because of the fees and the additional interest earned, lenders can increase their profits and so will be eager to help the borrower through this method.

An interim mortgage is an excellent way to resolve short-term financial needs. They can bridge gaps, eliminating the waiting game and the gambles that inevitably are confronted when attempting to stall during the process of purchasing a home. Whether the situation is avoiding spending time without a residency or acting quickly to get into a dream house for an incredible price, interim financing is available to make it possible and benefits everyone involved.

What is the GLM Mortgage Group?

GLM Mortgage Group, powered by Dominion Lending Centres, is your Vancouver and Lower Mainland Mortgage Brokerage service. We are always ready to move forward with you to obtain the mortgage you need with the sharpest mortgage rate available. Whether it’s a fixed rate or variable rate mortgage you are after, we are dedicated to finding the best mortgage rates in Vancouver, including Home Loans, Consolidation Loans, Lines of Credit and more. No matter what you need, our team of Mortgage Specialists will follow through to find the best mortgage product that fits your individual circumstances. Our free online mortgage calculator keeps you informed on how much your mortgage payment will be as well as show how different mortgage rates will affect the mortgage you require.As your Vancouver mortgage broker, GLM Mortgage is committed to clear communication with our clients. We make sure you are informed on all the mortgage options available to you. We call you back within 90 minutes to make sure that you have the fastest service available.

We are not only available in Vancouver and the Lower Mainland, we are also available across Canada.GLM Mortgage Group is your Vancouver mortgage specialist. With over 22 years of experience in the investment industry we know how to wade through the challenging process of getting a mortgage. We provide smarter options to putting your mortgage in place. We know how important it is to have an experienced professional Mortgage Specialist available to walk through your mortgage experience and stay with you through to the very end.We get you a fast “YES” at the sharpest rate… guaranteed! Call us now so that you can get that mortgage you’ve been waiting for. We already have been working for you, making sure that you will have every option of a mortgage available to you. GLM Mortgage Group is on call for you!