Benefits of a Bridging Loan
By John MussiA bridging loan can be used to cover the financial gap when buying one property before the existing one is sold. They are looked on as short term lending to cover a specific short term need.
A bridging loan as the name implies is a loan used to “bridge” the financial gap between monies required for your new property completion prior to your existing property having been sold.
Bridging loans are short term loans arranged when you need to purchase a house but are unable to arrange the mortgage for some reason, such as there is a delay in selling your existing property.
A bridging loan can also be used to raise capital pending the sale of a property.
Bridging loans can be arranged for any sum between £25000 to a few million pounds and can be borrowed for periods from a week to up to six months
Because of the nature of bridging loans they can usually be arranged at short notice and within a few days.
A bridging loan is similar to a mortgage where the amount borrowed is secured on your home but the advantage of a mortgage is that it attracts a much lower interest rate. While bridging loans are convenient the interest rates can be very high.
When considering a bridging loan please remember that you may be paying not only for the bridging loan but also for the mortgage on your existing property.
Bridging loans are widely available and can usually be arranged by your existing mortgage provider.
Although bridging loans are convenient, you need to consider the pitfalls too, like the high interest rates.
You may freely reprint this article provided the author's biography remains intact:
About the Author
John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the www.directonlineloans.co.uk website.
Other Resources:
Wake Up Baby Boomers Theres Still Time
Guide to Personal Secured Loans
Keeping Below the Radar
Do You Know the Pros and Cons of Interest Only Mortgage
Bad Credit folks helped by New FICO
California Bad Credit Mortgage
What Type Of Zero Down Mortgage Is Best For You
How To Make Affiliate Sales In 15 Minutes
Guide to Home Improvement Loans
Why Pay For Information Its All Over For Free
Home Mortgage Resources