Property Bridging Loans

A Bridging loans is used as short term Loan, in scenarios whereby you buy your new Property before you've actually sold your Current property

. If you use this type of loan facility, you basically have two s simultaneously on two properties. That is why a Bridging loans should only be a short term option, because it's an expensive way to buy a new property!

You have some options usually when you're looking to sell your Property in order to move to another. First Option is to sell your Property and ensure the sale completes at the same time, This Option is by far the safest and cheapest option as it precludes the need for a Bridging loans. It is also the most common option for most people. But there are occasions when option 2 is used.

Second Option is to use a Bridging loans to allow you to buy a new property whilst you endeavour to sell your Current Property, in effect the Bridging loans is used to finance timing differences between sale and purchase. A Bridging loans is a short term interest only loan secured on your current Property, to allow the proceeds to be used for the purchase of your new property, before your Current property is sold. It basically bridging loans the gap between the sale of your old and new Property purchase.

So why would you want to take the risk and run the expense of this type of loan facility. Quite simply a Bridging loans is often the difference between securing the Property of your dreams, if you can't sell your Current Property you run the risk of losing out to buyers in a better Economical position. It's at this point that you must whether to risk losing the house or risk the additional expense of a Bridging loans. Because the repayment of the Bridging loans is dependent on the sale of your Current property to release the necessary funds, most lenders charge high interest rates on bridging loans.

You must seriously weigh up just how much you want your dream Property, because every month you pay additional interest on a Bridging loans you are effectively increasing the purchase price of your new Property. Before you take out a Bridging loans you should seek independent advice from an Economical adviser from the real estate market.

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by: moreforeu

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