You are thinking of buying a residential or commercial property but you have no sufficient funds. Well, you want to sell old house or any asset to have required funds to buy new property. However, selling old property at desired prices may take time and you do not want to sell it in a hurry. To help you combat a scenario such as this, lenders have designed especial loans named bridging loans. Bridging loans are interim financial short term arrangements for the borrower to allow him buying a property just in time. These loans bridge the gap in selling old property and buying the new one. Clearly the borrower has sufficient loan amount to own a property instantly without having to sell old one. Bridging loans are secured loans, provided against the borrower's home or any valued asset. The loan amount depends on the value of the property given as collateral. Lenders mostly approve bridging loan amount that is up to a certain percentage of total value of collateral. Each lender has a different loan to value ratio in determining the loan amount. One characteristic of all bridging loans is that lenders charge interest at high rate. High rate of interest is because bridging loans have risks for the lenders despite being secured one. For instant the project funded from the loan may not take off successfully. Another reason for high rate of interest is short term. All bridging loans are approved for few weeks to 3-4 years as suits to your ability to sell old property or have finance to repay bridging loan from any other source. What is more, you have the option of repaying the loan amounts in one go at a time when you have sold old property. Till then you can only pay interest per month to the lender. So bridging loan is seldom a repayment burden. One advantage of bridging loans is its easy approval for bad credit people as lenders do not take into account the borrower's bad credit. So, the short term loan is useful also in improving your credit score shortly as you pay off the loan in time. You can locate numbers of bridging loan lenders on internet. Search for the suitable lender before applying to one.
Askmeformoney. Com Find out how bridging loans work through the help of the top mortgage professional in Noosa, Ian Robinson.
