Basics Of A Bridging Loans
Have you ever felt that having a little bit of more money in your hand could have
turned fortunes your way? I hope many of you would answer with a big yes. And this yes would be very important for the one who wishes to sell a property of his or hers and buy a new one. The pity in major cases would be that a good house as per his dream would have been found, but alas the home he currently lives in does not sell immediately. Heres the option for such cases, take a Bridging loans and buy your new home and repay back the same when you sell yours.Bridging loans based on the example citied earlier can be termed as a bridge to attain your financially attainable dreams or goals. The Bridging loan acts as a link enabling you to achieve your requirements in time so that you may not miss that once in a lifetime opportunity you have. These loans are normally very short-term loans that can go on for about one to twelve months. These loans are normally repaid back on selling of the property, thus enabling a person to avail a win-win situation. You may take it up like this, you wish to sell your home and buy a new one. You buy the new one you like immediately, pledging your old house to get a bridging finance. Your old home sells after a period of 8 months and you repay your Bridging loan.
These loans like other type of loans are provided my numerous financial institutions. Just search through the internet and you are bound to see at least a few hundreds of them in the place where you live. Bridging finance are quite catching up in the market. This finance find numerous takers right from real estate investors, stock market investors to business investors.
These loans do tend to be a bit more expensive compared to the regular loans you may avail. This is due to the short tenure of the loan. Quite intelligent isnt it? Its you who pays lots of money whether its a short-term or long-term. Well here are some facts that would surely help you about knowing more on bridging loans.
Short term loans intended for specific purposes like real estate, business, buying of shares, etc.
The tenure of the loan can be to a maximum of 12 months
All loans are subjected to the valuation of the property or commodity. The valuation process determines the amount of loan you are bound to receive
Loans involve extra costs for valuation, professional costs, etc. which is normally a one-time cost.
The financial institution providing the bridging loans tends to take into security both of the properties i.e. the one you intend to sell and the other you have bought.
This loan is normally costlier than the home loans that are available in the market.
There is a breathing period provided in bridging finance that enable you not to pay back for a few months.
by: Oliver Smith