What type of financing allows a mortgage company to temporarily hold loans before selling them?

Interim financing is a short-term loan that provides the necessary funding for a borrower until more permanent financing can be secured. This type of financing is particularly relevant in real estate transactions, where a mortgage company may need to temporarily hold onto loans before selling them to investors or bundling them with other loans for securitization.

Interim financing enables the mortgage company to manage cash flow and liquidity while awaiting a more stable arrangement. It serves as a bridge between the initial funding and the eventual permanent financing solution. This is crucial in the real estate market, where timing and availability of funds can significantly impact transactions.

The other financing types listed serve different purposes. Revolving credit typically refers to credit facilities that allow borrowers to withdraw, repay, and borrow again up to a set limit. Long-term financing generally involves loans with terms that extend several years, ideal for large purchases such as homes. Fixed-rate financing, on the other hand, provides a stable interest rate for the duration of the loan, making monthly payments predictable. While all these options are integral to real estate finance, only interim financing specifically relates to the temporary holding of loans by mortgage companies.