PSI Virginia Real Estate Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the PSI Virginia Real Estate Exam with comprehensive quizzes. Study using flashcards and multiple-choice questions, complete with hints and explanations. Ace your exam with confidence!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What is the primary purpose of a bridge loan?

To finance the purchase of a new home while selling the old one
To provide long-term financing for real estate development
To fund a company's operations until longer-term financing can be arranged
To help homeowners with immediate cash flow issues

The correct answer is: To fund a company's operations until longer-term financing can be arranged

The primary purpose of a bridge loan is to finance the purchase of a new home while selling the old one. A bridge loan serves as a temporary financing solution, allowing borrowers to access funds quickly in order to close on a new property before their current one has sold. It essentially "bridges the gap" between the sale of the old home and the purchase of the new one, facilitating a smoother transition by providing the necessary capital for the new purchase without having to wait for the sale of the old property to be finalized. While other types of loans, such as traditional mortgages, are typically used for long-term financing (B) or for business operations (C), bridge loans specifically cater to individuals who find themselves in a dual-property situation. They can also sometimes alleviate immediate cash flow issues for homeowners (D), but their primary function is tied to enabling the transition from one property to another without financial interruption.