When a lucrative deal to purchase a new property is set and at very moment if there is insufficient amount of cash to buy the intended property, then you will be on the verge of missing the deal. In fact financial gap do occur when you are going to purchase a property, but it should not hamper the deal. For these specific situations, opt for bridging loans which provide quick finance to meet your cash assistance.
Bridging loans are designed to finish the cash gap which occurs when you are going to purchase a new property. These loans are specially meant for shorter duration and are secured against your existing home. This loan can be used to buy any property such as residential, commercial, semi commercial, industrial sites etc. This loan successfully acts as a conduit to offer finances when it matters most.
Although this loan is secured against collateral, due to its short term nature it carries a very high interest rate. Loan amount derived is based on the present value of the property in financial market. Loan applicant can avail sum of £100,000 which can be extended up to £400,000 based on individual circumstances. You can pay back the loan amount within a period of one year as these loans are available for a shorter duration.
These loans are available in the financial market in two forms. They are open end and close end bridging loans.
- Open end bridging loans: This loan is meant for those borrowers who have not sold their existing property and are facing cash shortage.
- Close end bridging loans: This loan scheme is available for a fixed time period and is meant for those borrowers who have sold or exchanged their existing property.