Closed Bridging Loans
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 a closed bridging loan 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 bridging loan is repaid as and when the client finds that they have the ability to pay, a closed bridging 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 are planning to renovate or restore a property, or number of properties, by a fixed date, then you can also apply for a closed bridging loan with a view to paying the funds back by means of long-term refinancing once your property, or properties, meet the requirements set by your mortgage provider.
If you would like to find out more about the closed bridging loan products we offer, please complete our online enquiry form and request a call back from a member of our bridging finance team.