Bridging Loans Explained

Bridging Loans Explained



Bridging Loans Explained
If you​ have found the​ perfect new home for you​ and your family and the​ offer has been accepted but things are on​ hold because you​ are having problems selling your current property,​ then a​ bridging loan could be the​ answer to​ your problem .​
The bridging loan is​ taken to​ do just as​ its name suggest,​ bridge the​ gap .​
While this might sound like the​ answer to​ your prayers and can indeed save you​ from losing your new dream home,​ they should only be considered as​ a​ last resort as​ they are generally the​ most expensive way of​ taking a​ loan .​
However when taken in​ the​ short term they can be the​ only solution to​ your problem.
There are two main types of​ bridging loan; these are termed the​ open bridge and the​ closed bridge .​
The closed is​ available to​ those who have already made an​ exchange on​ the​ property they already have,​ this is​ because very few offers fall through after the​ exchange has been started.
The open bridge loan is​ given to​ those who have found their ideal property but have yet to​ put the​ home they have currently up on​ the​ market .​
a​ lot of​ backing will be needed for this type of​ loan and you​ will have to​ prove that you​ have a​ lot of​ equity in​ your property before you​ are given the​ go ahead.
Those offering a​ bridging loan can expect the​ lender to​ want to​ see the​ mortgage terms for the​ new property along with the​ details for the​ property and of​ course you​ will have to​ show that you​ doing whatever you​ can to​ make sure that you​ sell your existing property .​
The lender of​ the​ bridge loan will also want to​ make sure that you​ can make the​ repayments on​ the​ loan and you​ will be asked to​ show how you​ intend to​ do this and also how you​ would cope if​ the​ worst come to​ the​ worst and the​ deal fell through some months later down the​ road.
The majority of​ lenders who offer a​ bridging loan of​ this type will give you​ a​ limit of​ 12 months on​ the​ bridging loan .​
However most will allow you​ to​ negotiate after this period of​ time providing of​ course that the​ interest has been paid on​ the​ loan and no changes have occurred in​ the​ circumstances .​
The best way to​ get information regarding bridging loans is​ to​ look online,​ here you​ can not only find information regarding the​ different types and what is​ available but you​ can also make comparisons and find the​ cheapest deal for your circumstances.




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