Whilst bridging loans have traditionally been seen as a last resort because of high interest rates, they can in fact be a very flexible short-term option if you need to arrange funding quickly.
Bridging finance can be arranged in just a matter of days and typically lasts between 6 to 18 months. It is most often used to “bridge” the gap between a property sale and purchase in order to give the borrower time to arrange a traditional mortgage on the property. Bridging finance can be secured on all types of property including those that would otherwise be unacceptable for the majority of mortgage lenders.
At Key Solutions, we are a leading bridging finance broker with access to specialist lenders who will look on this type of lending favourably. We can arrange a bridging loan as either part of a planned purchase or in an emergency situation for example to prevent a sale falling through at the last minute.
When to use bridging finance
There are a number of possible scenarios in which you may need a quick and flexible short-term lending solution such as:
- Preventing your sale chain from breaking down – bridges can help you to continue with the sale chain and complete your purchase. Finance only has to be in place until the sale of the property has completed at which time your traditional mortgage comes into play.
- Auction property – with tight timeframes for completion, bridging loans can be a quick and flexible way of ensuring you have the finance you need in place to secure an auction property.
- Property renovation & development – properties in poor repair, deemed unsafe, or in need of refurbishment often struggle to be accepted by traditional mortgage lenders. A bridging loan would allow you to complete the work and sell the property or refinance it with a traditional mortgage once the property meets the lenders requirements.
Whilst bridging finance has its benefits, there are other considerations in addition to higher interest rates to take into account before choosing this type of finance:
- Administration and legal fees tend to be higher for these types of arrangements
- You need to ensure you have a backup plan should your planned repayment strategy fail, for example the planned sale of your property falls through
Making it easier for you to arrange a bridging loan
Whether you are an individual looking for short-term finance or a limited company or other entity our team of qualified mortgage advisers can help you arrange bridging finance quickly and easily.
Why not get in touch with us on 0800 138 5856 for further advice or complete our contact form and a member of our team will call you back with more information and advice within 24 hours.
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