It is a short-term loan designed specially to help out people until their existing property sells. Usually, the money lender expects you to repay the loan within a year of selling the existing property. Over the past few years, more people are opting for this type of loan because of the fact that housing market is growing stronger each passing day, placing sellers of property in a stronger position to sell their house on their own terms.
This type of loan is used to fund short-term residential or commercial renovations, to safeguard purchase of property in case the mortgage is delayed and to buy properties at auction.
It is one of the most flexible loans available today. If you are buying a property, you can take this loan against mortgaging a new property. Being a short-term loan, they are usually available at a higher interest rate than a traditional mortgage.This type of loan is available for almost all types of clients, from people having difficulties in obtaining loans and mortgages to those having great credit history; from individuals to limited firms and companies, including self-employed and people having a poor credit status.
Banks and financial companies consider various different kinds of assets as a security for this type of loan, from commercial, residential to semi-commercial land or properties. These properties can be in the need of remodelling or in a perfect condition, be of non-standard or standard construction or partially or fully developed.
This loan is available in two types – open bridging and closed bridging. Open bridging is a condition in which you have not finalised the terms of selling a property but you are sure to sell it and buy a new one. On the other hand closed bridging is a condition in which you have decided on the terms and conditions of buying and selling a home. So, choose the one depending on your situation.
Bridging Loans - An Overview