Closed Bridging Finance
Unlike an ‘open’ bridging loan, which is a type of loan product that has an open-ended repayment period, closed bridging loans are only appropriate for those with a clear exit strategy. For example, if you have already exchanged contracts and you know that you will receive payment by a certain date, then closed bridging finance is the most competitive borrowing option based on your circumstances.
Purchasing a new property with a closed bridging loan
The main difference between an open or closed bridging loan is in the differing repayment options. Whereas an open bridge loan is repaid as and when the client finds that they have the ability to pay, a closed bridge loan is a short-term loan that has a fixed repayment date. If you are looking to release the equity in a property that you own and you have already exchanged contracts, then a closed bridging loan can be arranged with the final repayment date matching the date of the completed sale.
Once a contract is set in place, the vast majority of property sales are usually achieved without any major complications, and therefore a lender is much more likely to provide secured finance in these situations. If you intend to renovate or restore a property, or a number of properties, by a specific date, you can apply for a closed bridging loan with the intention of repaying the funds through long-term refinancing once your property or properties meet the requirements set by your mortgage provider.
If you’d like to learn more about the closed bridging loan products UK Property Finance provides, please fill out our online enquiry form and ask for a call back from a member of our highly experienced and devoted staff.