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Monetary Bridge during Property Transaction: Bridging Loans
By Amanda Thompson
Many a time, it is seen that people try to buy a new property by selling their present property. Though, it is a good option, but sometimes it is seen that borrowers cannot do these two things at a time. Keeping this thing in mind, bridging loans are introduced in loan market, with which borrowers can make their property transaction easier.
Bridging loans are considered as a secured loan, secured on borrower's property. So, in case if you want to avail these loans, you will have to place something against the lending amount. Many a time, it is seen that people use their new- purchasing property as a security. It can be any type of property, such as, housing or auction properties, commercial properties, retailing shops, overseas property etc.
In stead of purchasing price, the value of the property is taken into account while providing bridging loan. The range of lending amount varies in between £25,000 to £500,000. The equity of a property is checked in case borrowers want to avail a higher amount. However, it seen that lenders provide up to 75% of the property value as bridging loans.
As a short term loans, bridging loans are offered for a short period of time, from few weeks to six months and this period can be extended up to 2 year. During the loan term, borrowers require to pay only the interest rate. The principal amount can be repaid after the present property is sold. Lenders pay back all the unearned interest in case borrowers can sell their property within the limited term period. On the other hand, if bridging loans are matured before selling property, then it will be transferred into general loan and for that, borrowers won't be charged any penalty.
Now let's check what advantages one can get with bridging loans. Usefulness of bridging loans is inescapable.
• Bridging loans assure borrowers about the availability of fast finance. Yes, if your all necessary documents are prepared, you can avail the loan within 24 hours.
• Since, these loans are short term loans, so there is a possibility of paying off the amount quicker.
• A borrower, having a bad credit score can also take the advantage of these loans.
• There is a possibility of not paying any upfront legal and agreement fees, as most of time, lenders do not ask for it.
• Moreover, no penalty is charged with bridging loans.
About the Author
Amanda Thompson holds a Bachelor's degree in Commerce from CPIT and has completed her master's in Business Administration from IGNOU.To find a Debt consolidation loans, Bridging loans, Cheap rates, Personal loans, Secured loans, Unsecured loans that best suits your needs visit http://www.chanceforloans.co.uk
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