bridging loans.co.uk

Six Month Bridging Loan Product

In response to the current business and economic climate an increasing number of businesses are taking advantage of a bridging loan to re-locate or help with short term cashflow problems. The standard problems involved in arranging a mortgage on property that has been purchased at auction using bridging finance has been exacerbated by the introduction of new policies from many major banks and building societies that prevent borrowers from arranging a re-mortgage unless they have owned the property for a minimum of 6 months. For traditional users of bridging loans this has created potentially much higher costs as they are forced to extend the term of the expensive short term loan and find themselves unable to move the mortgage product to one from high street lenders that offer much lower interest rates. Bridging Finance Limited are one of the major specialist lenders who have introduced a product specifically to cover this issue, their six month bridging remortgage is geared to overcome the problems encountered by clients who previously moved in and out of a bridging loan very quickly by using the 'bridge' to cover a short space of time until they were able to swap to a traditional mortgage The nature of a bridging loan is that it is meant to serve as a short term solution to funding a property purchase and the interest rates charged always reflect this. Property investors often use short term bridging finance to release cash or equity in order to be able to complete another deal. If a customer needs to raise a cash sum to purchase a property before being able to arrange a traditional mortgage for example at an auction, then bridging finance can cover the period in between both transactions. Typically a loan would be agreed for a period of up to 12 months but more usually for a few weeks. The loan would be secured against at least one property and often two and any default in repayments or other conditions could (and still do) have very serious consequences for the purchaser. A good advisor will make sure that you are aware of the implications of taking out such a high cost property loan product. The financial industry has begun introducing new products that take the new six month restrictions into account. Bridging loans are now available at a lower interest rate with the option to extend the loan to cover a six month period, giving customers the peace of mind to know that they will not be charged penalty fees or other charges whilst they wait for their mortgage to be approved. Residential customers who are considering using a bridging loan will also have the security of being able to plan their outgoings if there is a delay in the paperwork or legal searches during the sale of their current home or purchase of a new home. These new products are designed to take into account the fact that customers will be forced to wait six months before being able to arrange a mortgage with their bank or building society. The products are also suitable for customers who may be buying a run down property in need of renovation work before the regular mortgage lender will agree to a mortgage on the property. Anyone who is moving into a property that requires substantial building works can now agree a bridging loan to cover the period of the renovation and then apply for a mortgage from their preferred bank or building society. A bridging loan can often be an expensive option but could now be an affordable option when considering a loan that will be in place for over six months. A good broker will be able to advise both business and private buyers about the suitability of these new products and explain the conditions and risks that may be involved.

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