Can banking get any more complicated? Hey man, you have no clue. But in fact, clients can make banking and the loan industry complicated:
At first, somebody wants to buy a house but doesn’t have any cash available for a down payment. So, banks create mutual funds to help him save.
Then, this same individual can’t manage his budget so he can’t really save. And, banks come up with RRSP loans.
Now that he has a 5-10% cash deposit saved, he now wants to buy his house right away. Therefore banks offer him a mortgage.
But the guy wants more flexibility as he wants to make home renovations and buy a new car. So the banks create the home equity line of credit.
And guess what? The same guy doesn’t want to manage notary/lawyer’s dates while buying and selling properties. This is why banks created a bridge loan.
What is a bridge loan?
A bridge loan is a very interesting product for individuals who don’t want to bother about dates when selling/buying their properties. A bridge loan is a short term loan that advances the amount of your cash down temporarily between the sale of your current house and the purchase of the new one. Read More…