How Does a Senior Bridge Loan Work?

If you’ve made the decision to move into assisted living, one of your top concerns is likely how to pay for it. Thankfully, there are numerous loan options available. One of the ways you can fund a transition into assisted living is known as a bridge loan. Read on below to find out more information about senior bridge loans and how they work.

What Is a Senior Bridge Loan?

A bridge loan gets its name from, essentially, being a way for individuals to bridge the gap between living in a residential home and moving to another. The loan provides funds for living expenses while an individual waits for the sale of their house to go through.

The funds go directly to the assisted living center with this specific type of case.

What Are the Benefits of a Senior Bridge Loan?

Moving into assisted living is a big transition on its own. Thankfully, getting a bridge loan means that a senior would not have to wait to enter assisted living after their house sells.

Because this loan works as a line of credit, fee charges will be recurring. This is typically easier to manage than having to pay all fees at once, in a lump sum.

Essentially, the major selling point of a senior bridge loan is the flexibility it provides. This is a benefit for the senior entering assisted living and their loved ones handling the finances.

And another benefit is that up to six family members can contribute to the payment.

How Does a Senior Qualify for a Bridge Loan?

You will need the sale agreement from your current home and a purchase agreement for the new residence. Because the loan serves as a bridge, many will apply for it before their house has a date of sale. In this case, an individual should apply with a private lender instead of a larger financial institution.

How Does Repayment Work?

Senior bridge loan repayment can vary depending on individual circumstances. The repayment period is usually 12 months. But depending on the lender and/or an individual’s financial situation, it could be extended.

Are There Any Downsides of a Senior Bridge Loan?

Almost any loan comes with some risk. And before applying for a senior bridge loan, you should be aware of the full picture.

Senior bridge loans can come with high interest rates and origination fees.

One of the ways you can try to avoid the risks associated with senior bridge loans is by researching the housing market. Is it bad enough that you’re not sure your home will sell?

What Are Some Similar Financial Assistance Options?

If you’re not sure a senior bridge loan will work, it doesn’t mean you’re out of luck. Before applying for this type of loan, you may want to see if borrowing from your home’s equity is a better option. This can be in the form of a home equity loan or home equity line of credit (HELOC).

For the best in assisted living, turn to one of our residential communities here at Solterra Senior Living. You can find more information about Solterra Senior Living and about potential financial assistance on our website. You can find more information on this website as well. Contact us with any questions, either via our website or over the phone.