Bridging Loans Explained
A bridging loan essentially offers a way of 'bridging’ the gap between a payment going out and and money coming in. They offer people a short-term funding option to assist them in completing a property purchase that may otherwise not be possible. This could be due to a break in the property sale chain, or due to high market demand with properties selling quickly. Typically these loans can be arranged quickly, offering a viable solution for raising funds quickly.
Short Term Finance Solution
There are many reasons why a bridging loan may be used. If buyers need to purchase their new property before the sale of their existing property has gone through, this finance can be used the bridge the gap.
For landlords and property developers, these loans can help when purchasing a commercial or residential property at auction. There is a short space of time in which the developer will need to pay for the property in full and the loan allows them to complete the purchase whilst the mortgage is being organised.
Bridging loans can even be used in circumstances where a property is classed as ‘unmortgageable’ and this finance is used to make them habitable, and worthy of a mortgage. Other circumstances in which bridging finance can be used include:
- Business investments
- Property renovations
- Purchasing at auction
- Purchase of land and materials to build a property
- Purchasing a retirement property
- Payment of tax bills
How do I get a Bridging Loan
Finding a suitable bridging loan for your needs can be difficult as there are multiple bridging lenders out there. There are many options so it's always advisable to use an FCA-regulated broker to assist you in finding the most competitive deal.
Transparent Mortgage Services are experts in bridging loans. Our advisors will help find the best deal for your circumstances, or advise you on alternative finance sources that might represent a more affordable option.