It's all about bridging loans
If you are in the middle of moving house, and you have found
the just right new home but you cannot sell your current home, then you should
think about getting a bridging loan to pay for the loss.
A bridging loan is a loan that you take out when there is a brief
shortfall in cash when you are moving goods or business. You may also need a
bridging loan when import property at sale in order to pay for the property
within the 28-day time enclose. These loans are more risky for lenders, and so
are cheaper. Therefore you should only get out a bridging loan if you identify
that you can repay the loan in 6 months.
Eligibility of getting bridging loan ?
A bridging loan is often easier to obtain that a normal loan
or credit, with the self employed and people with poor credit history being
eligible for such loans. Obviously this depends on the lender, but in general
speaking you should be able to secure a bridging loan as long as you can make
the repayments.
How do bridging loans exertion?
Bridging loans in the case of property work by allow you to
take a mortgage out on the new property, and then take a second mortgage out on
the property that you are selling. You can usually have access to up to 65% of
the value of the properties, minus any existing mortgages that you have.
Depending on the property valuation this means you can borrow between £25,000
and £500,000 as a average figure.
Way to get a bridging
loan ?
Getting a bridging loan is much like getting any other loan,
and involve shopping around various online lenders and mortgage providers.
However, the main difference is that for the bridging loan a estimation will be
carried out by the lenders to ensure property value. The process usually takes
around 7-10 days, in which time you can sort out the rest of the legal
processes involved when retail a house.
Cost
Bridging loans vary in cost, with specialist lenders who
specialise in giving loans for auction having the lowest rates, as it is
assumed you can afford the property as you have already with authorization
bought it at auction. If you have bad credit then you will visibly pay more.
Interest rates on bridging loans are usually worked out on a monthly basis,
with an average rate being about 1.5% a month. Often, the interest rates for
bridging loans is less important because you are going to pay back the loan
quickly and the most important factor is getting the loan on time for you to pay
for the new property.
Any alternatives?
If you cannot sell your house in time to finance the new
property, then there are not many option open to you apart from bridging loans.
Of course you could get a usual loan, but this can take longer and the loan
terms might be too long or the amount offered too low. If you know that you
will have the money back from a property deal soon, then a bridging loan might
be the right pick for you.
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