Inevitably every mortgage broker runs into a situation where a client needs to bridge-finance the equity and closing costs on a purchase. Sometimes arranging the bridge loan can be just as complicated as the mortgage itself. Additionally, many lender’s bridge programs will not cover closing costs. RMA is launching a program that will make it easier for you to provide bridge financing to your clients that require it. We will bridge up to $50,000, for up to 30 days. The loan can be advanced as quick as 2 business days from the time of request. The arranging costs of the bridge-financing is as follows.
– For loans between $10,000 – $30,000 the arranging cost is $500 – No additional interest charged. Maximum term is 30 days*.
– For loans between $30,001 – $50,000 the arranging cost is $750 – No additional interest charged. Maximum term is 30 days*.
This is only available if the borrower is completing their new mortgage through a RMA broker, and, must use the same lawyer for the sale and the purchase. If you need more information about how this works and what documentation is required to approve and fund a bridge-loan, please reply back to this email.
(* in the event of a delayed closing extending past the 30 days, a per diem charge will apply)
The documentation required to consider a bridge loan is as follows:
1. RMA mortgage #
2. Proof that both purchase and sale are firm and your purchase file is complete
3. Draft trust ledger from solicitor indicating required owing including DP and closing costs
4. Purchase agreement and recent mortgage statement indicating balance of existing mortgage
5. Discharge amount of current mortgage for sale (can be an info statement or from solicitor)
6. Solicitor’s trust account details for deposit of bridge
Once the bridge loan is approved, the borrower will be required to sign a letter of direction indicating repayment terms and a promissory note for the full amount of the bridge loan and the arranging fee. These signed documents will be forwarded to the lawyer along with the instructions for funding and repayment of the bridge.