Reasons To Get A Bridge Loan
Bridging loans are useful for people with bad credit scores. A bridging loan is useful for someone who want to buy a property and cannot manage to raise the down payment amount. You may apply for a short-term or a long-term bridging loan. Many home buyers prefer short-term bridging loans as they are easy to get. The loan application process is short and straightforward. Bridging loans have a maximum of three years and a minimum of two months. The faster you repay the bridging loans the lower the interest rate increases. Once your short-term bridging loan is approved then it is easier to own the property. Sometimes you will find lenders offering bridging loans to cover mortgage payments of an existing home. Bad credit bridging loans are typically secured loans. The equity of the property is usually the security of the loan. People with good credit scores are charged a lower interest when they take up a bad credit bridging loan.
What You Need To Know Before Getting A Bridging Loan
Financing the purchase of a property is the main reason people apply for bridging loans. An open bridging loan is one where the fixed repayment date is set. An open bridging loan is one that does not have a fixed repayment date. Closed bridging loans are popular where the contracts have been exchanged on the property. If the contract for the property you intend to purchase has not been exchanged then you should apply for an open bridging loan. An open bridging loan is useful when you want to get a new property, but you are still in ownership of your previous property. Application for mortgages that have been declined can be substituted by getting a bridging loan. You should call the bridging loans company to share your plans and see if you are likely to get loan approval.
Essenstials Of Bridging Loans
The first thing to know about a bridging loan is the rate of interest payable. Closed and open bridging loans are the two types of bridging loans available. A closed bridging loan is safer for a lending company. Legal and valuation costs are not included in the open bridging loan making them very advantageous. If you are in the buy to let investment business as well as self-build projects you will most likely use the bridging loans option. If there are any outstanding taxes on a property and the owner passed on; the trustee may apply for a bridging loan to pay the outstanding fees to get the property. Bridging loans are a lifeline when it comes to financing several situations.