Benefits of a bridging loan

A bridging loan is a loan that can have many benefits and could suit your needs today.

A bridging loan is normally used to cover the financial gap when buying one property before your existing property has been sold. They are a short term loan to cover what should be a short term need.

The bridging loan as the name implies is used to span the gap between receiving the money from your property sale to put down on the new property you want to buy, hence the term to "bridge".

A bridging loan is a short term loan arranged when you need to purchase a house but are unable to arrange the mortgage for some reason, or that there is a perceived  delay in selling your existing property. Or possibly you have found a property you want to buy but as yet haven’t had chance to put your property up for sale.

A bridging loan can also be used to raise capital prior to the sale of your property for say refurbishments or you can use the loan at an auction.

Bridging loans can normally be arranged for any sum between £25000 upwards, the amount will depend on many factors and one of these is the value of your existing and the new property value. The bridging loan can be over the term of a week or much longer.

Because of the nature of bridging loans they can usually be arranged at short notice and the money could be with you within a few days of your application being received.

A bridging loan has similarities to a mortgage where the amount borrowed is secured on your home but the advantage of a mortgage is that it attracts a much lower interest rate. While bridging loans are convenient the interest rates can be very high. However normally only interest only payments are paid on the loan until the loan is due for to be repaid in full and sometimes the payments are rolled up into the loan. Each bridging loan lender is different and has different terms and conditions, so we would advise you to fully discuss these points with the lender.

When considering a bridging loan remember that you may end up paying not only for the bridging loan but also the mortgage payments required on your existing property.

Bridging loans are widely available and we are able to pass your details to some specialist lenders who will be able to help you with your bridging loan needs and requirements.

Although bridging loans are convenient and easy to arrange, be sure that you’re fully investigate them before completing on one.