Bridging
loan as the name implies is a
loan used to “bridge”
the financial gap between revenue
required for your new properties
completion before your existing
property has been sold. It can
be usually be secured on a property
of higher value than the required
borrowing.
Bridging loans can usually be
arranged at short notice, sometimes
within 48 hours if all relevant
paperwork is in order.
Bridging loans can be arranged
for any sum between £26,
000 to £5 Million pounds
and can be borrowed for periods
which range from a week up to
twelve month
You
must consider that when taking
out a bridging loan you may be
paying not only for the bridging
loan but also for the mortgage
on your existing property.
Although
bridging loans are convenient,
you should be aware that you will
pay a higher rate of interest.
A
bridging loan is similar to a
mortgage in that the amount borrowed
is secured on your property, but
of course a mortgage attracts
a much lower interest rate over
a longer term, whilst bridging
loans are convenient the interest
rates will be higher.
Bridging
loans can usually be arranged
by your existing mortgage provider/broker
A
Bridging loan can be invaluable
in situations of a temporary shortfall
in cash,
Loan
terms for bridging loans are much
shorter than other types of loan.
If your application is accepted
for bridging finance you will
receive a loan, which you will
be required to repay normally
in monthly instalments plus the
interest,
There
are different types of bridging
loans: An Open Bridging loan is
available when you have not yet
finalised the terms on which you
are selling your own property,
but are going ahead with the purchase
of another.
A Closed Bridging loan is available
when you have agreed the terms
on the property that you are purchasing,
and the one that you are selling,
but there is a delay in the move
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