These days, bridging loans are commonly taken during property transaction. You may hear the term but you may not be familiar with its feature. In this article, the basic feature of a bridging loan is penned in. If you have any doubt about the loan, this article will try to make you understand the nitty gritty of the loan.
Firstly, we will discuss that in what situation a bridging loan is taken. Many a time, it is seen that people want to buy a new property by selling their present property. Simultaneously, accomplishing both of these two things may not be possible for many people. In such cases, it is seen that they want to buy a property, but do not have enough cash for that, as the existing property is not being sold. A bridging loan plays an important role in such circumstances. With these loans, a borrower creates a monetary bridge between his anticipation and ability.
A bridging loan is a sort of secured loan. Therefore, pledging a security is necessary. As security, you can use the property that you are going to buy. It could be auction properties, commercial properties, retailing shops, overseas property and so on.
But remember, while offering a birding loan, a lender checks the worth of the property, not the purchasing price. With this loan, you can borrow anything in between £25,000 to £500,000. Usually, it is seen that as a bridging loan, a borrower can avail 75% of the value of property.
This loan is a short term loan, available for a few weeks to six months. You may also extend up the period up to 2 year. During this period, you will have to pay only the interest rate. The principal amount can be paid off after selling the property. If you can sell the property within the stipulated time, you will be given all unearned interest rate. Otherwise, if the loan matures before selling the property, it will be changed to a general loan. And for that you need not pay any fee.
Eva Baldwyn aims to inform common men and women of the several issues involved in personal loans and mortgages through her articles. An MSc in Economics & Finance from the Warwick Business School is proof enough of the knowledge that she possesses in the field of finance. To find bridging loan , development bridging loan, commercial bridging loan, residential bridging loan, personal bridging loan visit http://www.easybridgingloansuk.co.uk