Your situation raises a number of issues. First, a bridge loan is a temporary loan designed to allow someone to complete the purchase of a new home, pending the closing of the sale of their existing home. Typically the payments in a bridge loan are deferred during the interim. This is the benefit of a bridge loan, i.e., the borrower doesn't have to make 2 mortgage payments. Once the existing home closes, and the borrower pays off the mortgage, the deferred interest on the bridge loan is added to the principal balance of the new mortgage.
It is not clear why you would need to come up with $17,000 to close at the last minute. As one of your other respondant's mentioned, the place to start if you are considering your options, is with the original loan documents. I am not familiar with Canadian laws, but in the US, lenders must provide a truth-in-lending disclosure and a good faith estimate of closing costs at the time of application. These are intended to inform the borrower about the cost of the credit they are receiving, and estimate the amount of cash the borrower will need to close. What was the amount of cash which was originally needed for closing? Was it close to the $17,000 figure?
If the numbers weren't even close, the lender may have violated the law regarding disclosure of these costs. You may have grounds to sue to recover your damages. I would suggest you contact an attorney to discuss what options are available to you.
I am a real estate attorney.
· 1 decade ago