Bridging Loans

Bridging Loans

Bridging Loans
A couple of​ years ago my wife and I​ were in​ the​ process of​ selling our house .​
We were pretty sure we had found a​ buyer and had agreed on​ a​ price acceptable to​ both them,​ and us but they wouldn’t be able to​ buy our house for about three months .​
My wife and I​ were totally ok with this since we weren’t in​ any particular hurry to​ move,​ we just wanted to​ move into a​ bigger home outside of​ town,​ somewhere a​ bit more rural .​
Well,​ one weekend while we were driving around the​ countryside looking at​ houses,​ we saw the​ perfect farmhouse .​
It was exactly what we were looking for .​
Not too far out of​ town,​ on​ a​ quiet road,​ overlooking a​ little lake and surrounded by tall oak trees .​
In short it​ was perfect .​
We contacted the​ selling agent and found out that the​ price was within our budget,​ but only just .​
We told him it​ would be three months before we’d be able to​ buy it​ and this caused him to​ pause .​
Apparently there was a​ lot of​ interest in​ that little house and he couldn’t justify delaying the​ sale for three months .​
So we let it​ go .​
Why a​ Bridging Loan?
We did find another beautiful house so the​ story has a​ happy ending but is​ there anything we could have done to​ get that first house? the​ answer,​ had we known it​ at​ the​ time,​ would have been a​ bridging loan .​
Bridging loans are short-term loans offered by commercial lenders to​ borrowers for a​ specific purpose .​
They can range in​ time from two weeks,​ for a​ very short loan,​ to​ up to​ three years for commercial bridging loans .​
Homebuyers who have not yet sold their property and wish to​ buy require these bridging loans .​
Interest Rates
The interest rates are probably higher than for your typical mortgage but this is​ because of​ the​ added flexibility and convenience you​ have from the​ lender .​
There will also be set up fees involved .​
However,​ they may work out at​ significantly cheaper than some of​ the​ alternatives such as​ renting accommodation .​
There will also be many situations in​ which the​ price will be well worth paying if​ it​ means getting your dream home .​
You should always shop around before agreeing to​ a​ bridging loan as​ rates and fees can vary significantly .​
You don’t have to​ get it​ from your mortgage provider although there may be advantages to​ doing so.

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