Why Use Bridging Finance

Do you know about bridging finance or bridging loan? Maybe some of us not familiar with this term. Read the republish article about bridging finance.

bridging_finance

Traditionally Bridging Finance, or Bridging Loan as it is also known, has been used to ‘bridge’ the financial gap between the sale of one property and the purchase of another. Allowing borrowers to purchase the second property before selling their existing property.

Numerous other uses for Bridging Finance include –

Allowing Buy to Let investors achieve a discount for a faster completion
Auction purchases, where funds are required quickly to complete the purchase
Entrepreneurs requiring a quick injection of cash to fund a new business opportunity
Property developers, utilizing the speed of Bridging loan to quickly buy and sell on a property

Fast Cash When You Need It Most
The traditional mortgage application route is well known for the snails pace at which it can sometimes operate. At the speed we live in today’s postmodern age this can be a very frustrating state of affairs.

The property market has numerous opportunities but many can be left on the shelf. Either through the chain collapsing or the lender not having funds in place quickly enough. To add to this a discount on a property is a definite possibility if funding can be arranged quickly enough. Bridging Finance is a fast and easy solution to all these headaches.

But why is this? It’s very simple. Bridging Finance tends to be ‘Non-Status’. Lenders consider the type and quality of the property as security as a measure of the lending possibility.

Unlike traditional lending bridging underwriters are generally looking at minimum lending terms of between 3 months, 6 months or 12 months. But some lenders are even more flexible in this regard and will lend with no minimum period on the loan. Lending is available at up to 75% LTV (Loan-To-Value), in some cases 85% LTV may be available. Apart from credit checks, the non-status factor is the same as mainstream non-status lending. The benefit is that the decision to lend is very much faster.

A Short Term Solution

Bridging Finance can bridge a financial gap. But it should never really be considered a permanent solution. A more permanent solution in the form of a regular mortgage should be considered if the property is to be held on to long-term. Or in the case of a more speculative investment the borrower will sell the property to make a quick profit.

Bridging Finance is flexible in another way. In terms of the redemption date it can set as both ‘open’ with no definite end to the loan, or ‘closed’ with a set redemption date. It is advisable to only use the open variety when you are confident of the sale of a property or the replacing of the loan with a more long-term finance solution.

Bridging Finance remains the fastest and most appropriate loan type for making a property purchase quickly.

In the same way that having a healthy relationship with the people in your life
It is December which means we will welcome another years. Before 2018 end, I'll like

4 comments

  1. Hi,

    I am Martha Jackson and I am a member of some financial communities. I just visited your site http://yourfinancialblog.com/ and trust me you are doing a good job for your site. I read some of the articles of your site and I really found them worth reading. The quality of your content is excellent. It will help you to earn extra value from search engines.

    After seeing this, I would like to do something for your site and that is for FREE!!. I love to write financial articles and I would like to contribute something for your site if you’ll give me the permission. I can give you an original guest post and I assure you that it will be published only in your site.

    Please let me know your thoughts. Waiting for your positive reply.

    Thanks and Regards
    Martha
    martha.jackson815@gmail.com
    http://www.facebook.com/jackson.martha

  2. thanks for your concern.. I love to read that you are interested in my site. I will email you for more detail..

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.