Using the property or assets to avail loans in an emergency is a good idea. With hundreds of loan plans available in the UK financial market, you can cut short the emergency cash requirement. There are certain loan plans which meet the financial requirements arising between the two property transactions.
Financial situations may be different for different people applying for such loans. The reason for taking a loan may be a no-deal situation for your old property or the money that you got from the sale of your old property still falls short of the value of the new property that you are buying.
Bridging loans are taken by borrowers to bridge the gap between the sale of one property and purchase of another property. These loan plans are always secured against residential or commercial property. Usually people opt to buy another property only after selling the existing property. There might also be a situation when you plan to buy the property without selling your existing property. In such circumstances, these loan plans are the best options. These loans are generally of short-term in nature and the repayment period varies from 1 month to 12 months. You are supposed to sell your existing property within this time period to payback your loan well in time.
These loans are also the best options when you buy a new residential property in auction. During this time, requirement of fund is fast and urgent. These loans are much quicker to arrange than a normal residential mortgage - within 3 to 5 working days from making application to the approval. Bridging loans are of two types: open end and closed end loan plans. Open end loans are the ones which are borrowed when the deal is yet to be completed. For example, if the borrower wants to buy a new residential property, but has not found a customer for the old one, he takes open end loans and pay for the cost of the new property. Closed end loan plans are the ones which are borrowed when there is a gap in cash transactions after old property has been sold. You can also have this loan option when money from the sale of old property is yet to be received.
The E-lending facility has helped in fast approval of bridging loans. The borrower needs to submit an online loan application form giving the personal details like name, residence address, telephone number, income status, etc. The borrower can easily log on to the Internet and compare different bargains to get the best suited deal. The borrower should do proper research before finalising a particular deal. Borrowers with bad credit history like CCJs, Bankruptcy, arrears, etc. , are not debarred from loan availability. Since, the borrower keeps security against the loan amount, the bad credit history does not bother the lender very much and these loans are offered only by charging little more interest rate.
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