http://www.sharewisdom.org/home-and-garden/buying-a-home/ Buying a Home wisdom, knowledge, advice, tips and information shared by others. Share your wisdom with others. en Sat, 28 Oct 2006 13:12:56 EDT http://www.sharewisdom.org/home-and-garden/buying-a-home/102.html Upgrading and renovating a home (ie. installing new carpeting / hardwood / ceramics / kitchen cabinets, or adding/modifying a bathroom, etc.) is typically a disruptive event that requires whole areas of a home to be cleared prior to working on them. It makes a lot of sense to do such upgrading and renovating before you move into the newly purchased home, while it is completely empty and uncluttered. One way of doing this is through a financial instrument called bridge financing, arranged through your mortgage lender. If you're selling one home and buying another, bridge financing allows you to have possession of the property you're buying for any desired period - typically less than one month - before the closing date on the home you're selling. In other words, for a short period you own both properties. Here's how it works: when you're selling your existing home and buying another, typically the closing dates for both properties coincide, so that you're not owning more than one property at the same time. From the bank's perspective this is necessary because it uses the proceeds of sale from the home you're selling as downpayment for the home you're buying. With bridge financing the bank effectively lends you the downpayment money for the property you're buying - which of course is still tied up in the home you've sold, but which has not yet closed. Th bridge loan is typically prime + 1% or 2%. However, since it is only for the few days, or weeks, that you've requ http://www.sharewisdom.org/home-and-garden/buying-a-home/102.html