Getting a Caveat Loan
If you have an existing mortgage and you suddenly need additional money for additional investement, you might find bridge loans as a good option. Bridge Loans are also called, caveat loans or short term second mortgagee. It is because in most cases, a caveat loan could be obtained even if you have an existing home loan.
The credit facility could mature in as short as a month. In some cases, the maturity could last up to four months. Your mortgage lender would not have any issue if you apply for and complete the transaction.
Top reasons for getting a caveat loan
Bridge loans are ideal financial solutions for borrowers who have immediate need for money. The loan amount should be used for investment. Loan providers of bridge loans make sure you are seeking a loan for the right reasons. They would require you to present a feasible and specific exit strategy as a form of assurance that you would be able to repay the loan within the time frame set.
If the purpose is not for investment or business, you may have a hard time obtaining an approval for your bridging loan application. However, there are loan providers out there that could consider a few other valid reasons for seeking such loans. You may still get bridge loan approval if you are intending to use the fund to pay off any overdue/overlooked tax debt, to cover a shortfall on your property settlement, or to refinance other loans. Recently, caveat loans have also been approved for borrowers who suddenly need cash due to unexpected downturns.
How to apply for one
Many borrowers are enticed by how easy it is to apply for a bridge loan. Find a loan provider that offers and provides such loans. You may still do a comparison shop focused on rates, costs, and terms to choose the best among the available caveat loans from various loan providers. Banks usually do not offer and provide such products.
You should fill out necessary application forms, which are provided by loan providers (at their offices or online). You would have to submit a Privacy Consent form and basic loan application documents like your recent mortgage statement, rates notice, and identification papers or asset titles (photocopy). All forms and documents could be sent to the loan provider through email or fax.
Upon submission, your caveat loan application would be processed right away. Loan providers want to be sure you hear about the status of your application as soon as possible so that releasing of the loan amount could be facilitated in time for your urgent need. The amount could be picked up as a check or could be deposited directly to your bank account.
While bridge loans have numerous advantages and could help you to overcome a financial issue, it is highly recommended to seek professional advice to make sure that a caveat loan will be the best option for your situation.