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Are you interested in purchasing a new home? Then you probably you need to sell off the home you currently live in, to raise the required funding for buying the new place. This will need to be timed just right so that everything falls in place nicely. A buyer has to be found for the old property and that transaction needs to be finalised. Then you can proceed with buying the new property you are interested in. What is so difficult about this? Often it will take so long that you might actually lose the property you had your eye on to another buyer. How can you resolve this problem?
You need some short term finance to quickly gain access to the required funds and secure the new property for yourself. Without going with a bridging loan, you could miss your chance of getting the dream home you wanted.
Bridging loans are a type of short term secured loan. Property or some other valuable asset must be used as collateral to secure the loan. This collateral is needed to reduce the amount of risk the loan provider is taking by lending you the money. What kind of assets can you use as loan security? It depends on the lender and the exact situation, but it has to be an item of value such as:
– A residential property
– An auction property
– A commercial property
– A semi-commercial property
– Buy to let property
– A retail shop
– Overseas property
– Land or site with planning permission
– A development site
– Heavy machinery
– Business equipment
Search around to find a short term finance to find the best bridging loans. There are plenty of top UK loan providers who specialise in closed and open bridge loans. Going through an online website is the preferred option for many people, as it has many advantages over other options like building societies and banks. You usually get better terms and conditions and a short term loan tailored more closely to your needs. Another advantage is the quicker turnaround time.
The maximum allowable loan amount will depend on the valuation of the collateral. The value of the asset will be a limiting factor for how much you can borrow. With bridging loans the amount that can be borrowed can range from 20,000 pounds to one million pounds and above. Very high amounts will need a bit more time to arrange, so keep that in mind when making plans. Also the lender you approach may have a limit on how much can be borrowed. Shopping around is definitely a good idea, so that you can find the loan provider that works best for you.
The repayment period can be as short as a few weeks and as long as 18 months. Some loan providers could extend this to around 2 years depending on the circumstance. Borrowers need to be certain that they have the necessary means of repaying the loan amount on time and in full.
Article by: Sidney Terrell (email: sidneyterrel.blog