Missing out on the perfect home is no fun, but it’s something that many people experience. A bridging loan could be the ideal solution for securing that dream home.
A bridging loan is a short-term loan used to act as a bridge before funds are released from the sale of existing properties. It provides the money required to purchase a new home without having to wait for the deal to go through of an existing home.
Buyers are able to buy a house without having to wait to sell their current home, meaning they beat other potential buyers to it.
A bridging loan enables people to keep their place in a chain, particularly if a buyer pulls out. This means that their dream home is secure despite not being able to sell their previous property.
It also opens up more choices when it comes to the property market. In fact, a bridging loan gives the freedom to buyers to purchase any home on the market even before the sale of their existing property. This is an important benefit as it allows buyers to choose from a wider range of homes.
The ability to buy a new home before selling an old one means that furniture doesn’t need to go into a storage facility. This saves both time and money and is less stressful when it comes to moving home.
When buying a property at auction, a bridging loan provides people with the cash to do so without the need to wait for the sale of an existing home. This is great for those who want to buy a property that’s being auctioned before they’ve managed to sell their home.
A bridging loan isn’t just a loan that can be used against houses. Apartments, stores, maisonettes, and commercial premises can also be used as security when taking out one of these loans. This offers greater flexibility to buyers who may currently have existing properties.
The process to secure a bridging loan is fast and easy. In fact, compared to other forms of finance used for purchasing a home, buyers can see the available funds in their accounts in a short space of time from applying.
Finding a bridging loan is different from other financial products on the market as major banks rarely offer them. In fact, it’s usually best to speak to specialist brokers to find the best bridging loan for individual requirements.
People also find their own bridging loans and are advised to research and compare products from a range of providers before choosing their loan provider.
When it comes to bridging loans, there are usually a few options available. Some people choose to borrow the difference between their current balance and up to 80% of the value of their existing home. These funds are then applied as a down payment on a new home with existing mortgages intact.
Other people choose to roll both of their mortgages up into one payment. This allows for one large loan of up to 80% of a home’s value. People pay off the balance on their first home before applying the second towards a down payment for their new home.
Bridging loans are an important way for many to purchase their dream home and provides an alternative for many to do so without the need to wait for the sale of their existing property, freeing them of this burden so they can move forward with their perfect home.