Bridging Loan

In essence, a bridging loan is frequently the preferred option when a property buyer wants to quickly access funds to acquire a house with the least amount of time, stress, and paperwork. Everyone from people wishing to assist a residential real estate transaction to developers and enterprises looking to manage huge and complicated commercial property portfolios utilise property bridging loans. This includes individuals, companies, trusts, and businesses.

Depending on your situation, a property bridging financing company can recommend a different type of bridging loan, such as auction finance. Bridging loans can be used for a variety of purposes, including the purchase or renovation of a primary residence, second home, investment property, or commercial building. These loans are complex and sophisticated, so they should only be taken out by borrowers who are familiar with its characteristics, know exactly what they want to use the money for, and have a solid plan for how to get out of the loan in the end.

Borrowers should only employ property bridging loans if they have a clear strategy for repaying the loan before the redemption date. Otherwise, the loan can become exceedingly costly and hazardous (with this risk already priced into the higher monthly interest charge.)

Bridging loan examples

Property bridging loans are both specialist in nature and flexible in their application. The following examples illustrate how they can be used:

• By an individual who wishes to buy a residential property whilst awaiting the sale of another to complete.
• By a developer who wishes to refurbish or improve a property which is deemed to be unfit for human habitation and is currently ineligible for a standard mortgage.
• By a company which buys properties at auction, and needs to secure rapid finance to secure the deal, whilst organising more long-term finance.