How bridging loans work

What is a bridging loan? Do you want to buy a new house, but you are still waiting for your first house to be sold? Or are you a business owner who is eager to buy a new premise, but a bit short on cash? This can be highly stressful, especially if you’re relying on using the proceeds from selling your current property to purchase your new home. This is where a bridging loan can be utilized to ‘bridge the gap.’ Good news: there are a variety of lenders that supply bridging loans to help acquire your ideal property. How does it work? A bridging loan can be a lifesaver when you find yourself in a tight spot and need extra cash while waiting for your house or property to be sold. A bridging loan covers the purchase price or the advance payment for your prospective property whilst giving you time to sell your current home, even with an existing mortgage. It is an additional loan on top of your existing home loan (usually for up to 12 months). Some benefits of a bridging loan Flexibility Bridging loans are renowned for being a flexible way to access short-term capital. Generally, non-bank and private lenders tend to be more flexible with their loan criteria and processing time than traditional financial institutions. Quick access to funds Bridging loans can be arranged quickly – often within days of the successful application, which is why this loan type is appealing in an emergency or if there are time-sensitive opportunities… Read More