Bridging finance is helpful for those looking to get quick and short-term secured loans. It can be used to overcome a specific financial issue or to complete the purchase of a property quickly. It is ideal for property developers and investors who usually need quick funds to purchase properties that they intend to refinance or sell within a short period.
Dueto flexibility and ease, this type of loan is becoming popular quickly. If you are thinking of taking out a bridging loan UK, here we are discussing some important facts about it that you need to know.
Bridging loans are an excellent way to get funds in a short time. For example, you find a perfect property to purchase, and you have a limited time to avail this opportunity. It may take a long to find a buyer to sell your existing property and get funds to complete the new property purchase.
You can take out a bridging loan and purchase your desired property in such situations. You can repay the loan amount after the sale of your property. Moreover, sometimes it is possible to secure 100% purchase price through bridging finance.
Bridging finance is much more flexible compared to traditional mortgages and high street lenders. When taking out a loan from conventional lenders, you have to provide more information like income and credit history and wait for a long time to get approval.
On the other hand, bridging loan providers are usually concerned about the property you are using as a security against the loan. In addition, the loan repayment terms are usually amended according to the borrower’s situation and requirements. However, it is vital to remember that you have to repay the loan within a year.
It is a funding source that can support you throughout your property development project. If you are looking to buy a property to develop and sell it at a better rate, it may be challenging to secure a loan that you require at that time.
As a result, you can not complete the development and end up holding that property for a long time. A bridging debt can help you access funds at any stage of development of a property and complete development at your desired deadline. You can repay the loan when you sell your property or refinance.
Secured Against Any Type Of Property
Another good thing about bridging finance is that you can use any type of property, including uninhabitable or non-standard properties, as collateral. You can use this type of loan to purchase all types of commercial and residential properties. So, no matter whether you are thinking of investing in buy to let property or in serviced apartments, bridging loans can always help you.
Renovation of Uninhabitable Property
It is now possible to complete the renovation of properties with the help of bridging finance. Most high street and mortgage lenders do not grant funds for renovations projects or inhabitable properties. Thanks to bridging debt, you can secure funds to renovate or repair the property to make it habitable. This way, you can increase the property’s value and get profit.
Financing For Auction Purchases
Auction is an exciting opportunity for landlords or property investors to purchase a property below its market value. However, if you won a bid at an auction, you have to pay a 10% deposit on that day and complete the remaining payment within 28 days. You need a quick funding source in such a situation as you can not get quick funds through a mortgage. Bridging debt can be a perfect solution to purchase properties at an auction.
Help In Getting Planning Permission
It is difficult to secure a loan for purchasing land that does not have planning permission in place due to the risks involved. However, you can purchase land with bridging funds and easily get planning permission. This way, you can sell a property with planning permission at a better rate.
Facts About Bridging Finance | Bridging Loan Providers |Short Term
Meta Description Bridging loans is a short-term and quick funding solution. Know about key facts about bridging loans and choose the best bridging loan provider.