An alternative to a traditional mortgage a bridging loan is method of acquiring short-term finance secured against property. The loan can then be utilised as a solution to a temporary cash-flow problem incurred during the purchase of a property for either business or private purposes and works as a very short-term mortgage.
The most obvious and prevalent use for a bridging loan in the private sector would be if, during the purchase of a new house the sale of your existing property unexpectedly falls through. This nightmare scenario could then result in the purchase of the new property also collapsing due to a serious cash shortfall which could endanger the transaction. In this circumstance a bridging loan would provide you with the finance needed to complete the purchase of your new house.
The speed in which bridging loans can be expedited (typically less than a working week) also provides a measure of security in ensuring that the perfect deal doesn’t fall through your fingers due to a convoluted ‘chain’ process and can also save you from losing any money already paid out during the buying process to date.
As the basis for the loan is the property that you are in the process of selling the value of the loan therefore will not exceed this value and due to the short –term nature of the loan and the value of the property should eliminate any prospect of negative equity.
A bridging loan also has the advantage of being more accessible to people who may have had problems securing a mortgage from traditional lenders as the only pertinent question is the value of the property to be used as security. In not asking the same questions or applying the stringent criteria of traditional mortgage lenders bridging finance is therefore accessible to borrowers who may be unable to secure finance through traditional means. You only borrow money that is held in property you already own.
Typically the bridging loan can be viewed as an interest-only loan which is based on an independent valuation of the property used as security. This therefore requires you to pay the only interest monthly and using the profit from the sale of your property to pay off the loan’s principle in one lump sum.
A bridging loan is an ideal short-term solution for a transaction in danger of collapsing especially of benefit to anyone unsuited for a more traditional mortgage arrangement.
For all your fast bridging loans contact Masthaven Finance on: 020 7036 2000
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