Bridging Loans can help you buy your home

You’re in a difficult spot. You’ve found the property or land you want to purchase or you’ve got a business that you want to expand, but the bank won’t lend you the money you need to make the deal go through in time. Is this you? Perhaps you have a property with lots of equity but you have loads of unsecured debt, again your bank or building society don’t see you as a good candidate for a loan. There is a loan solution that can help you overcome these problems and secure your property or investment, the solution?, bridging loans.

If you have never heard about bridging loans, then this post should help to shed more light on this type of finance. If you have heard of bridging loans but are unsure whether a bridging loan is right for you then read on. Bridging Loans are are form of short term finance that can help investors and home buyers to purchase the property they desire. They are especially helpful when purchasing a property at auction, they can help business owners with cash flow problems or even as part of a debt consolidation strategy.

When can a bridging loan help?

Example Scenario: You see a property at auction that you want to buy. You need to raise enough money to fund the entire purchase and do the renovation work needed so that the property can be sold again on the open market at a profit. You have a house that you own with a mortgage and a little equity in it.

Solution : An Auction bridging loan can be used to finance the purchase of the property and the renovations. Using the extra funds raised you do the renovation work within the prescribed timescale and either sell the property at a profit or remortgage with a standard mortgage at the new market value. The proceeds are used to repay the loan.

Key Features of Bridging Loans

• Your residential or commercial bridging loans can be authorized in a matter of hours
• You can receive up to 85% LTV (loan to value) on the property market value
• Funds can be made available in days
• Lending can be arranged for a period of up to 9 months

What Bridging Loan is right for you?

Let’s look at the types of bridging loan that you may need. It is much better to go equipped with the right information when trying to obtain the right finance deal. You can get bridging loans for commercial, residential, land and auction purchases.

• Commercial bridging loans can be used for debt consolidation, to release funds to ease short term cashflow or fund conversions of commercial premises.
• Residential bridging loans can be used for home improvements, purchase of new property, renovation work or even repayment of debts.
• Land bridging loans can be used by builders, developers, self build projects, where traditional lenders will not support to the purchase.
• Auction bridging loans can be used to finance the purchase of a property from an auction. Traditional lenders don’t move very fast, however this type of finance can help you to purchase a property at auction and complete within the usual 28 days whilst you are looking for a standard mortgage.

Bridging Finance is not new

To recap the benefits or this type of finance. The speed with which you can get a decision and receive the funds make this type of finance deal attractive. It means you can get on with your business without the usual delays associated with many property purchases. Commercial developers and builders have used bridging loans to finance their property and business deals for years. You will still need to have good credit to get the best deals, however as the loans are secured on the asset, there is much more opportunity to get a deal that fits your actual situation, rather than your past history.

Related Posts

• Safe Home Income Plans
  I talked about UK mortgage lender Northern Rock and the sale of their equity release mortgage portfolio (see Northern Rock Relieved of Equity Release Portfolio). As part of the research I found out about a company called Safe Home Income Plans. Safe Home Income Plans were formed in 1991 with the aim of ensuring some form of protection for equity release plan holders. They state their aims as follows (I imagine hand on heart...
• UK Buy to Let landlords enjoy a bumper year
  Strong tenant demand could mean more people looking for buy to let mortgages in the new year According to the latest figures contained within Paragon Mortgages Buy-to-Let index, the annual return on buy to let property over the past 12 months is as high as 25.1% in some places, (this is a combination of capital gain and rental income). This percentage return, coupled with the strong demand for rental accommodation is something no potential property...
• London Property Auctions May 2008
  We are well into the second quarter for the year and the UK property market is definitely cooling. The London property auctions are still doing business as more and more people turn to property auctions to secure either investment property or a homes for sale. Although I missed the April post about upcoming property auctions, I am making amends and getting the May property auctions post out right away. If you're looking for an investment...
• What You Should Know About Equity Release Mortgages
  Finding the best equity release mortgage to fit your circumstances as a home owner is a task that can seem quite daunting. After all you are releasing equity from your home which is your primary asset. It is the reason you are considering this form of finance. You want to know how to go about getting an equity release mortgage and releasing the money tied up in your property. Questions you may have about equity...
• Property Auctions Dec 2007
  Last chance til February to bag a bargain property at an auction for this year. If you are looking for an [tag]investment property[/tag] or to purchase your own home, [tag]property auction[/tag]s can offer the opportunity to by a property at less than the price you see in your local estate agents. Remember the deposit An important aspect of [tag]buying property at auction[/tag] is that you should and need to do your own research. It is...