Open or Closed Bridge Financing
The two main types of bridge financing are known as open or closed. Closed bridge financing refers to when the dates of the loan are set right at the beginning of the loan. This keeps risk to the absolute minimum, because the lender knows exactly when they will be paid back.
The second type of financing is known as open bridge financing. This is applicable when a seller has their home on the market, but they have not yet finalized any sales. They may still want to start looking for a new home to buy, but don't know exactly when they'll have the means to do so. If you decide to apply for bridging finance in this type of situation, there is a bit more risk involved in the eyes of the lender. There is always the chance that your property will not sell, or that it will sell for less than you anticipated. As a result, interest rates will be higher. The date when you'll have the money to repay your loan is not specified, but you will be given a general window of time to repay it.
Investment Property Financing