Bridging Loans - Fulfilling Financial Shortfall between Real Estate Transactions

You are trying to buy a new property and selling the current one to raise money for the new purchase. It is usually difficult corresponding sale of one property with the buying of another. This almost always leads to financial gap. For this particular circumstance bridging loans are organized.

Bridging loans are another term for short term financing. It is meant for real estate financing until permanent financing is secured. Commercial real estate transactions require bridging loans to "bridge" in cash gaps.

Bridging loans can serve to fill up temporary shortfall while buying property, business or even paying for renovation. Bridging loans can serve the same function if you are buying property at an auction.

Bridging loans are secured loans, secured on property. The borrower would be required to place significant collateral. A Bridging loans lender would accept the following as security for the loan ?

Residential properties
Auction properties
Commercial and semi-commercial properties
Development sites
Sites with planning permission
Buy to let properties
Retail shops
Overseas property

Heavy machinery, business equipment, inventory can also function as collateral. Bridging loans can be secured by getting a mortgage on the new property and taking out a second mortgage on the property being sold.

Bridging loans involve an evaluation of property. Bridging loans are offered on the value of the property and not the purchase price. Bridging loan approval process is the beginning of getting a bridging loan. If this is your first time at loan borrowing, start looking around for loan lenders that you are at ease with. Getting pre approved would give you an idea of how much you can get. Being pre approved, enables you to act quickly when the property is available. Loan amount on bridging loans can range from £25,000 to £500,000. The loan amount usually depends on loan lender so shop around for better deals. Higher amount can be arranged but usually takes longer time.

Bridging loans, loan term that can be anywhere between a week and six months. The maximum term is two year. The borrower must be certain of his situation and that he can repay it within a short period of time. Speedy finance is probably the most sought after benefit of bridging loans. Bridging loan can be made available within 24 hours, if you have all the necessary documents ready. Most bridging loan lenders do not ask for upfront legal and arrangement fees. Usually there are no redemption penalties with bridging loans. Self certification in the context of bridging loans is also possible.

Be prepared to pay more on bridging loans. A bridging loan poses a sizeable risk to the loan lender because the old home may not sell for some time. The interest rate on bridging loans is comparatively higher than conventional mortgages. The typical interest rate is one half of a percent. The interest rate is generally dependent on credit history, value of collateral placed and loan term. The borrower starts making interest payment at the end of the term, in case, the old property is not sold. After the old home is sold, the bridge loan is paid back. If the house is sold within the term limit, all the unearned interest is credited back to the borrower.

It is a short term mortgage and bridges in temporary shortage of finances in the face of a real estate transaction. The bottom line is bridging loans are for short term financing. They are devised for a specific purpose and therefore not meant for everyone. It is also available for bad credit. Thus, bridging loans can assist in forming a record so that you can apply for conventional mortgages. Having a trust relationship with the loan lender makes bridging loans process highly uncomplicated. However, if you can't boast of such an association, don't sign anything related to bridging loans without completely understanding the loan process. The market for bridging loans is constantly increasing. Healthy competition has resulted in keeping the bridging loans interest rate low. This has made bridging loans a realistic option for those who need funds quickly.

After having herself gone through the ordeal of loan borrowing, Natasha Anderson understands the need for good quality loan advice. Her articles endeavor to provide you the wise counsel in the most elementary way for the benefit of the readers. She hopes that this will help them to locate the loan that beseems their expectations. She works for the UK secured loan web site uk finance world.To find a Secured or unsecured loan that best suits your needs visit http://www.ukfinanceworld.co.uk

---

Applying for a Payday or Cash Advance Loan Online

Applying for a payday loan online is a quick and... Read More

Online Loans: The Easy Way to Apply

The internet is a great place to find the right... Read More

Personal Loans for Unemployed ? Liberating You from the Tangles of Unemployment

Like most of the contingencies (the after effects of unemployment... Read More

Finance Your Home Business: Six Ways Under Your Nose

There are lots of ways to get additional capital to... Read More

No Credit Car Loans - Even With No Credit History, You Can Still Get Approved

Even it you have no credit history, you can still... Read More

If You Consider To Get a Quick Cash Loan Then Reconsider It

A quick cash loan also called payday loan, cash advance... Read More

What You Should Know About Home Equity Loans

A home equity loan is essentially a type of second... Read More

The Wonders of Compound Interest

Albert Einstein called compound interest "the greatest invention of all... Read More

High Risk Personal Loans ? Revive Frustrated Loan Hunting Attempts with High Risk Loans

Bad credit seems like an unfinished business, you can't shake... Read More

To Find The Right Loan You Must First Find The Right Lender

We have found internet shoppers to be the savviest in... Read More

Finding and Getting Bad Credit Loans

If you don't know where to turn for bad credit... Read More

Lawsuit Loans - Caveat Emptor!

If you have been injured in an accident it is... Read More

A Brief History of Loans

No one can say for certain where the history of... Read More

Devising Newer Ways of Repayment

How good would it have been had there been no... Read More

What is a Bad Credit Loan?

A Bad Credit loan is a personal loan for people... Read More

Simple Tips On Getting Your Loan

So, you want to get a loan?Here are some simple... Read More

Secured Loans Information

A secured loan is a personal loan which is generally... Read More

Benefits of a Business Loan

There are many benefits in choosing a business loan, some... Read More

Bridging the Gap ? through Bridging Loans

You were on your regular walk with your wife, and... Read More

Facts You Should Know About Types of Loans

When you set out to borrow, you often come across... Read More

Why Choose a Personal Secured Loan?

Listed below are some of the many reasons why choosing... Read More

A Brief Look at the Origins of Lending

When trying to discover the origins of lending you might... Read More

How to Find a Cheap Debt Consolidation Loan

If you're shopping around for a cheap debt consolidation loan,... Read More

Compare Payday Loan or Cash Advance Lenders Online Before You Borrow

Comparing payday loan lenders, also called cash advance lenders, online... Read More

Law Practice Finance

How do you finance a growing practice? It is impossible... Read More

Finding the Bad Credit Personal Loans that You Need

It can seem impossible at times to get bad credit... Read More

The Average Profile of Customers Opting for a Payday Loan Cash Advance

Payday loans are loans of a small amount, taken for... Read More

No Credit Check Personal Loans - If You Need Fast Cash, A PayDay Loan Online Is a Very Quick Process

Online payday loans can get you fast cash through a... Read More

An Overview of Getting a Homeowner Loan

Should you be in the market for a homeowner loan,... Read More

What is a Homeowner Loan?

A Homeowner Loan is a way of using the equity... Read More

Benefits of a Home Owner Loan

There are many benefits for choosing a Home Owner Loan,... Read More

Financial Aid for College Students - Grants

The bad news about attending college is that it costs... Read More

What is an Unsecured Loan?

An unsecured loan is a personal loan where the lender... Read More