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Bridging Finance

Shopping around for property can turn out to be quite the adventure. You might be intent on selling off your existing property before buying another one. But this may not always pan out according to your plans. What happens if you end up finding the ideal bit of real estate even before you have managed to find a buyer for your home? Well, if you are certain that finding a buyer for your current home will not be too difficult, you can avail of Bridging Finance from one of the more reputed lenders in the market. True to their name, bridging loans help bridge the gap when you are faced with a temporary shortfall in your finances. In fact, you need not use bridging loans only to buy property. Bridging loans can be your knights in shining armour in paying the bills for even your latest home improvement endeavours.

Do remember, however, that bridging loans should never be your first option. Treat them instead like a last resort. This is because Bridging Finance tend to be relatively more expensive compared to other kinds of home loans. If you are confident that you will be able to meet the cash shortfall within six months or so, then bridging loans may be a good idea. If you cannot summon that kind of financial confidence, it would be better to look at other finance options.

In general, there are two types of bridging loans -- the "open" and the "closed" bridging loans. The latter is a lot less risky for both the lender and the borrower. This is because the open Bridging Loan is forwarded to borrowers only after the contracts for one's existing property have been exchanged. This exchange of contracts generally suggests that the deal is likely to go through without any glitches. Thus, the danger of non-repayment on the borrower's part is limited. The open Bridging Finance is a riskier proposition for the lender. If you are applying for such a loan, it will help your case if you have amassed a lot of equity on your existing home. Plus, you will have to prove to your lenders that you are seriously working on getting a buyer for your existing property. This will be crucial in helping you get loan approval.

The value of Bridging Loans can be as little as £15000 and it can go up to as much as £5,000,000. The lower and upper limits of bridging loans vary from lender to lender. These are not to be confused with the many-decade-long Home Loans that are availed of by most property buyers. Bridging Loans are essentially short term loans that can have terms ranging from one month to twelve months with some extensions thrown in. Depending on which lender you turn to for your bridging loans, you could end up paying as little as 1 percent per month as interest on your loan. Most banks and lending institutions deal with bridging loans but you also have the option of looking up a specialist bridging loans provider.