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Bridging Loans
A Loan taken on a short term basis to bridge the gap between the purchase of one asset while waiting to sell another it particularly common in the property and housing market.Bridging Loans a hypothesis
Imagine you are buying a new home but also at the same selling your old home (you are in a chain), at some point you may need to buy your new house before your old one is sold, or maybe the seller of your new home may require completion before a certain date. So without the proceeds from your old home's sale you would in a bit of a mess . This is where bridging loans come in.Why choose a bridging loan
Short term bridging mortgage loans provide assistance in cases of a temporary cash shortfall or in a crisis, during the purchase of property, land and business. This normally occurs when a buying chain is broken or where the purchaser needs to complete before the sale. Bridging loans can be provided for:-- Residential Property Purchase
- Renovations
- New Build
- Refurbishment
- Commercial Property Purchase
- Land Purchase
- Speculative Properties
- Conversions
Loan providers like bridging loans because:
-
Customers get bridging loans at times when they actually need them
So loan providers can take advantage of this.
- Bridging loans are borrowed for periods from a week to up to six months.
Bridging loans are meant to be paid back very quickly making them less risky. But the people taking out a bridging loan are usually in a situation where they would accept an expensive rate on the loan. A bridging loan is not too dissimilar to a mortgage. Your home is always at risk if you do not keep up repayments on a loan secured on it !!!!!!!!