Bridging Loan Popularity Soaring Among Senior Borrowers
Bridging finance has been growing in popularity across the UK for some time. But what is particularly interesting is how more senior borrowers (of retirement age and older) are taking an interest in bridging loans than ever before.
Despite the fact that seniors are considered more financially savvy and asset rich than their younger counterparts, they are often rejected by major lenders for even the simplest financial products. The reason is that as their long-term earning potential is lower and they may have no formal proof of income, they fail to meet the most basic checks carried out by mainstream lenders.
As a viable and cost-effective alternative, short-term lending is attracting the attention of seniors in record numbers. Issued primarily or exclusively on the basis of security, short-term loans like bridging finance can be quicker, easier and less stressful to arrange.
Popular Uses for Bridging Finance
Seniors (and those over 50) are generally considered to be more financially experienced than all younger demographics. Therefore, they are able to see the potential value in bridging finance that goes far beyond any comparable mainstream loan.
While bridging finance can be used for almost any purpose, several common trends have been identified in the spending patterns of seniors taking out such loans. The most prominent of which being as follows:
- Purchasing a second or even third home to be fixed up and subsequently sold on for profit
- Buying a property at auction (to renovate or relocate to) at a price well below its market value
- To cover the costs of extensive home repairs or renovations before relocating or downsizing
- Buying flats or houses to let out to tenants to generate long-term regular income
- Taking advantage of investment opportunities (shares, Forex) under the advisement of experienced traders
Home Improvements Before Relocating
Perhaps the single most popular use for bridging loans among seniors is carrying out home improvements and alterations before relocating. Whether you are downsizing or looking to upgrade to a superior property, it simply makes sense to get the best possible price for your current home.
Quite often, a few enhancements here and there (funded by a bridging loan) can significantly boost the property’s market value, enabling the loan to be repaid in full and making a generous profit when the sale closes.
Seniors often make the decision to move to more desirable locations or simply wish to be closer to family and friends, upon reaching retirement. If the property proves difficult to sell for a decent price due to its state of repair, strategic use of bridging finance really could make all the difference.
Independent Broker Support
If you are considering bridging finance for any purpose and would like to ensure you get the best possible deal, independent broker support is essential. An established broker can conduct a whole-of-market search on your behalf, while ensuring your requirements are met with an appropriately affordable and flexible deal.
For more information or any of the above or to discuss bridging loan applications in more detail, contact a member of the team at Bridgingloans.co.uk today.