Bridging Loan
Bridging loans offer useful solutions to borrowers looking to secure short term finance. Knowing when and how to apply for a bridging loan can be confusing. Therefore, consulting a mortgage broker can assist home buyers in securing the finance that i
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Presentation Transcript
When considering the purchase of a property, it is important to consider the available financing options. A bridging loan is a well-established form of financing that is often used in house purchases. While there are numerous advantages to using a bridging loan, it is vital to understand how they work and when to use them.
A bridging loan is a short-term financial facility that allows borrowers quick access to funds to be used for a specific purpose and to be repaid at a defined event. Bridging loans are often used in real estate to assist borrowers with the purchase of a new property prior to the sale of their current property. Bridging loans are often quicker and easier to secure and allow the borrower immediate access to capital based on a future event. Bridging loans typically have their interest rolled up and last under 24 months. This means at the end of the loan term the borrower pays the full amount of the loan and any accrued interest.
Given the high interest rates associated with property bridging loans it is important to know when to use them. Bridging loans are most useful when a borrower requires quick access to capital for a short period of time. Bridging loans are generally used to take advantage of a time-sensitive opportunity, where longer term finance options would take too long.
Advantages Disadvantages Bridging loans offer borrowers a great degree of flexibility, allowing for high LTVs and shorter terms. Secondly, bridging loans can be arranged quickly to allow borrowers fast access to capital. Given that bridging loans have a defined exit strategy and are secured against a property, the due diligence process can be expedited. Given the short term of bridging loans, they are often associated with higher interest rates when compared with traditional mortgage bridging loans. In addition to this, they also have higher fees and structuring costs as a result of their expedited process.
Bridging loans offer useful solutions to borrowers looking to secure short term finance. Knowing when and how to apply for a bridging loan can be confusing. Therefore, consulting a mortgage broker can assist home buyers in securing the finance that is best for them. Visit - Silver Oak Capital https://www.silveroakcapital.co.uk/brid ging-loans-uk/
Visit - Silver Oak Capital 91 Wimpole St, Marylebone, London W1G 0EF, UK
