Exactly as a mortgage loan are backed by the house you to definitely you purchase on the currency, connection finance have to be supported by guarantee to safeguard the lender’s updates. From inside the a home, the best source of equity is the consumer’s existing family.
Like, for those who ordered yet another domestic and got away a link financing to afford financial on the existing family, the bridge mortgage was Michigan personal funding loans supported by your household. When that house is marketed and you intimate inside it, the fresh proceeds from the closing could be always pay the brand new connection financing.