Q. What is a swing loan?
A. This is a short-term loan that allows a homeowner to purchase a new home before selling one’s former residence. Example: Mr. Smith is moving from Seattle to San Diego. He finds a home to buy, here, but he has not sold his old home in Seattle. A lender makes a swing loan, lending him the $100,000 cash that he needs to buy his new home. Mr. Smith will repay the swing loan when he sells his old home in Seattle. These loans are also referred to as bridge or gap loans.
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