A Bridging Loan is it for you

At times, you may have immediate but big financial needs, you may think of selling your  property to meet those requirements. As we know that selling property is some what a time consuming job. As the need is immediate, you may not have time to wait for the sale to proceed and serve your needs. Bridging loans at such a time is the support you may be looking for.

Bridging loans are short-term loans to meet the temporary short fall of money. For example, we can say that it’s a loan for buying a second property before selling the first. You may be thinking that a bridging loan is only for buying property, but a bridging loan can solve any of your personal and urgent purposes. The reason why bridging loans are more related to buying of property is that these loans carry a higher interest rate and its better to use the loan amount for a purpose that serves you longer and better. Other than this you can use the loan amount for: 

• Holidaying and traveling
• Meeting wedding and educational expenses
• Expenses on illness of family member
• Buying car or boat
• Buying an overseas property

Bridging loans are basically secured loans. The security here is the property being sold. You can borrow up to 70 to 75% of the value of the security offered. A bridging loan comes in two forms: open and closed bridging loan.

• An Open Bridging loan helps you to buy a property before completing on your sale.
• A Closed Bridging loan helps if you’ve exchanged contracts on both properties, but there’s a delay in moving. 

Commercial & semi-commercial properties, residential properties, retail shops, auction properties & development sites, land with planning permission, buy to let properties etc can be used as a collateral or security for a bridging loan.

Self employed and people with poor credit score can also get the approval for the bridging loans. In figures, you can apply amount between ₤25000 to 3 million. In certain cases this limit extends. The amount that you can borrow is dependant on the value of your property and the existing loans or mortgages you have secured on your property.

To apply for a bridging loan, you can fill a simple online application form. The lender here will look for your personal details, loan amount required and security details. After the first application it takes 4-5 working days to get the approval for the loan. There are certain things which you need to take care of before signing the agreement. Make sure to ask the lender for: application fee, hidden charges and go through the terms and conditions for the bridging loan with due care.