Bridging
Loans
Information
on Bridging Loans
This
type of loan is used when you are attempting to buy property, or
a business. Maybe you are ready to buy a new home but the sale of
your current home may not have be finalised. This usually occurs
if a purchaser of your property drops out at the last minute and
the funds from the sale is needed to finance the next purchase.
Bridging
loans are normally secured on your property and since they are intended
for the short term they carry a higher risk to the lender. With
this risk you are normally charged at a higher interest rate to
the conventional mortgage. If the sale of your existing home fails,
there is a chance you'll have to sell your new home just to pay
off the monies borrowed. You will also have the costs of the interest
and the legal costs from the buying and selling to pay. These are
best left to persons who are sure that their situation is a short
term one.
They
can also be used to build a credit rating if you have found it difficult
to obtain a conventional mortgage. Bridging loans can be aquired
within a week and amounts can be paid over a short time span, ranging
from a week to several months.
OCIS
provide general financial information, we urge you to consult an
Independent
Financial Adviser ( IFA )
before making any important decisions about your finances. |
