‘Happy’ is when you finally find that dream property that you’ve always wanted to move into.
‘Not so happy’ is when you realize that you haven’t found a buyer for your old property yet. You thought you would buy the new home with the money you pocket after selling your current property. But now, you seem to be in a fix.
Cue drum roll… bridging loans. Bridging loans are a godsend for people in similar financial situations. Bridging loans are short term loans backed against a property. These loans will fund your buying until you arrange a long term debt or other refinancing options. Usually, bridging loans are offered for between one to eighteen months.
Here are seven reasons why we think opting for bridging finance is a sensible option.
Faster application process
Quite blankly, bridging loans can be arranged in a short span of time. Usually under two weeks. No surprises if you see funds deposited in your bank account in as less as 48 hours. While traditional ways of raising finances such as business, commercial loans may drag it for you anywhere between weeks and months, bridging finance can be arranged quickly, smoothly.
Faster property purchases
This should be a no-brainer. A faster loan application process indeed means that you will be able to buy your property of choice in time. This is also highly applicable in situations such as property auctions. Suppose you make a winning bid at an auction, you might be required to submit 10% of the property value as deposit on the same day and the remaining under 28 days. Then bridging finance will definitely help you out greatly in this situation.
Easy to obtain
The hassles that you have to go through to get financing from conventional lenders may be too much sometimes with their strict lending criteria. However, lenders who provide bridging loans are not that keen on your credit history and income. But at the same time, it goes without saying that they would be interested in the value of the property you’re offering as security and your exit route strategy.
Can be secured against any property
A bridging loan could be financed against any type of property that you own. It might be a house, a shop, a business or a commercial space, flat, warehouses, development plots etc. Not to mention that a bridging loan lender will be happy to consider your freehold and leasehold properties for security. Yes, even if the lease only has a short period on it remaining.
Avoid repossession of your property
If things go as worse as you bailing out on your mortgage payment, your home might be repossessed by the lender. What more, lenders usually try to sell off the property quickly- which means the property may not yield to its full potential leaving the owner(you) with lesser equity. To escape this dilemma, what you can do is pay off the outstanding mortgage with the help of a bridging loan and avoid repossession. Then if you want to, you can also sell the property profitably and pay off the bridging finance as well.
Property renovation
Maybe it’s been a while since you began thinking about adding that kitchen or that bathroom to your home property. What could help you is a bridging loan as raising finance from a conventional lender might be a difficult task for these circumstances. What more, you could use bridging loans to even purchase BTL properties and start paying off the loan as soon as you start receiving rent from the property.
No early repayment penalties
Another great advantage of bridging loans is that there are no early repayment penalties on your loan. Unlike traditional mortgage lenders, bridging loan providers do not charge a fee if you go in for early repayment. You have to pay interest only when the loan remains. So if you close the close prior, you’ll be saving some serious money.
Do you need a bridging loan?
Do you think you need bridging finance? Are you confused with respect to your current situation bridging finance will work or not? We at GPS Finance have been guiding hundreds of happy customers through their financial hiccups. We’d love to be of help to you as well.
Talk to us immediately at + 44(0) 203 489 4747 or just drop in a mail at info@gpsfinance.co.uk
