Learn the bridging loans definition and the purpose, audience and timing of these special method of financing provided to bank customers.
The Bridging Loans Definition
A bridging loan can be said to be short-term loan or funding option. As the name suggests, bridging loans are used to bridge an existing gap between debt coming due, primarily property transactions and the credit becoming available and which is the main transaction. In other words, this is a type of loan taken under pressing issue circumstances. The following is a guide to bridging loans.
What is a bridging loan purpose?
This type of loan is meant to help people complete a property purchase before they resort to selling their home by offering to them, access to money within a short period of time and at very high rate of interest.
On the other hand, these types of loans help people who are relocating when there is a slight difference between the completion and commencement dates in a row. This type of a loan can also be of great help to people who are on a quick sell-on after a home renovation or even help someone buy at an auction.
Who need bridging loans?
On a sincere point of view, these types of loans is aimed at amateur property developers and landlords, and those in an auction competition where mortgage is needed urgently and within the shortest time possible. On the other hand, borrowers who are in need of a straightforward debt on residential properties can be a good customer to bridging loans.
When should one use bridging loans?
This type of a loan maybe subjected to use for a wide variety of reasons which includes development, buy-to-let and investment. However, in recent time, there has been a development of a new trend among the borrowers to use these types of debts because street and private loaners are taking long to make application processing of home loans hence in this case, if you are looking forward to owning a home without the hustle of going through a million paperwork and a long waiting time, then it is high time for you to use this loan.