Open Bridging Loans
Bridging loans are usually classed as being either one of two types, depending on whether or not you have an exit strategy in place. An Open Bridging Loan is a type of property finance that is available to borrowers who are seeking to purchase a new property before exchanging contracts to sell an existing property. They are useful when you have equity tied up in a property but you are uncertain when the property will be sold.
Buy a Residential or Commercial Property with an Open Bridging Loan
Open bridging loans are suitable for property owners who are looking to release the equity in a residential or commercial property that they own before a sale has been arranged. They can also be used when a sale chain has been broken, i.e. in situations when a property owner has been let down by a buyer who has second thoughts or has found themselves unable to complete an expected purchase owing to unforeseen circumstances.
Unlike a closed bridging loan, which is only required for a short-term, fixed length period, an open bridging loan is not expected to be paid back within a concrete timeframe. The extra flexibility and increased risk factor from the lender’s perspective means that open bridging loan rates are usually a little more expensive than closed bridging loan rates.
When applying for an open bridging loan, it is usually left up to the borrower to decide how much they can afford to pay back and when – with many products offering convenient, open-ended repayment terms. With a closed bridging product, there are numerous fees and late payment charges that will be applicable should the final repayment fall outside the desired window. With an open bridging loan, these additional costs are avoided.
If you are interested in applying for an open bridging loan then please use the Quick Enquiry form provided on this page.