Transactional funding is a short term (one or two day) escrow funding to close a transaction in situations where the there are 3 transacting parties;
- Party "A" is the current property owner and "Seller" to Party "B".
- Party B is the Buyer to party "A" and the Seller to Party "C".
- Party "C" is the Buyer to Party "B".
You (as our borrower) are Party "B" are using funds as a credit to an escrow account to purchase from party A, and simultaneously sell your newly purchased property to Party C. Our funds never leave escrow, the closing agent will credit the purchase and sale accounts between all parties and net the amounts due to and from each party.
If there is any time delay between the sale from party A and the purchase from party C Transactional funding will not work due to the fact that the borrowed funds will have to leave the escrow account. Bridge funding is the appropriate vehicle for these types of transactions.
Rates for Transactional funding are 1.75% points, (minimum fee $1500)