Bridging loans were introduced to help out people with temporary cash problems. When an individual faces problems in acquiring any cash and is close to bankruptcy, a bridge loan may help him till the time he is able to acquire permanent cash. Bridging finance can help you with commercial establishments, residential homes and property as well as weddings, vacations, buying a business or making an unexpected payment.
Types of Bridging Finance
1) Commercial property – In order to make sure that a company does not completely run out of cash and goes bankrupt, bridging loans are applied for. These loans may also help distressed companies nearing bankruptcy till a suitable buyer is found. Moreover, businesses looking for commercials expansions or new property acquisitions are often seen applying for a bridge loan.
Short term funding for buying property, property development and land acquisition are other areas associated with these type of loans. Bridge finance also takes care of people who want investments for their new business or small organisations looking for a new commercial space. Bridge finance makes sure that you do not have to go though a lot of paperwork and other procedures of traditional money lenders, which is too time consuming and exhausting.
2) Residential property – Susan Jones from fast property buyer Asksusan.org.uk say’s: “Bridging finance for residential property purposes is usually taken when a person has bought a new property but has not yet sold the previous one. Bridging finance is usually not needed in areas where properties sell very quickly. People buy a new property in these areas and are easily able to sell the previous one. However, in areas where the property market is down or it is not easy to sell a house, bridge loans come in very handy”
How To Get A Bridge Loan?
If you are looking for bridge loan, then online search should be your first preference. You can search for specialist lenders who would be willing to provide you money in a very short span of time.
You may consider visiting a regular bank for bridging finance and directly talk to a specialist bridging lender for instant results.
Many lenders usually keep the current, as well as the new property in the form of security so that they do not have to face much trouble in the event of repayment failure. In such a situation, both the properties will be at a risk of being auctioned.
What To Do Once You Have Applied For A Loan?
Once you have applied for a loan, the first thing you should do is to get your property valued against which you have taken the loan. Usually, it is the lender who will get the property valued. Once this is successfully done, you can move ahead with the process. If everything is fine with the value of the property and the conveyancing needs, the entire process will be over within seven to ten days. Within this period, you will be contacted by the lender or the bank and the loan will be finally handed over to you.
Costs Associated With Bridging Loans
Bridging loans are usually very expensive. This is because the lender is the one who takes extra risk. You should only apply for this type of a loan if you are sure that you will be able to pay off the loan quickly. A fixed interest rate is usually set when we talk about a bridge loan. Look for a bank or lender who is giving you the lowest interest rate. People with a poor credit history usually have to pay more for the loan.
Choose a Reputed Lender
When you’re looking for bridging finance, you can not just trust any lender in the market. It’s important to find a trustworthy and reputed lender to make the most of this opportunity. These days, most lenders in the United Kingdom have their own websites, where you can find a lot of information. These websites explain the lender’s credibility and trust factor. Moreover, you can also find information about the interest rate and term of the loan.
Since taking a loan is a long term commitment, you should spend some time on research. You should compare several options before you choose a lender offering bridging loans. With the Internet, you can even send an online application, and get the loan cleared within a few days.