Five of the most common problems that can be quickly solved by a Bridging Loan

Bridging loans are a fast and flexible way for you to finance your property requirements. In many cases the money can be made available to you in just a few days and it can be the difference between you getting the result you really want or losing out big time. Here are five of the most common problems that can be quickly solved by a bridging loan:

1. You want to buy a property before you have sold your existing one
   Most people don’t have the luxury of finding the house they really want and going ahead with the purchase straight away. They have to rely on selling the property they have in order to raise the money needed to buy their new dream home.
   
   A bridging loan can go a long way to funding the new purchase without having to sell your existing home. The money is made available by the bridging loan provider to move forward with the purchase and the bridging loan is eventually repaid, usually when the original house is sold.
   
   It is the speed of a bridging loan that makes it so effective. Sometimes a purchase needs to be done quickly and not just because the prospective purchaser is worried they will lose the house to a rival. It could be that the move is because of a change of location for work and a property is needed on or before a certain date. A family member may be ill and a decision has been made to move nearer them as soon as possible.
   
   
2. As a landlord you have the opportunity to buy an investment property and need to act fast in order to get it
   You may well be able to get a Buy To Let mortgage, but it can take up to a couple of months from application to completion. A bridging loan will buy valuable time for you to get the finances in place without risking losing the property.
   
   
3. No formal re-payments until the loan is repaid
   For all sorts of reasons you may be faced with cash flow problems which mean you can’t buy a property, or land, in the timescale you would like. A bridging loan can be used for personal or business reasons and as there are normally no formal repayments until the loan is repaid, it can be the ideal solution for cash flow problems.
   
   
4. It can sometimes be quicker and you are less likely to default with a bridging loan as you are with a conventional mortgage
   If you are buying property at auction you are given 28 days to complete the purchase. Sometimes that is just not possible with a normal mortgage. If the property is in serious need of renovation then a conventional mortgage is not a viable option.
   
   Click here to learn more about unmortgageable properties
   
   A bridging loan is not dependent on the condition of the property as a normal mortgage is. It can be used to buy and even renovate the property before it can be repaid either by the sale of the property or refinancing on to a more conventional mortgage.
   
   
5. You won’t need to worry about mortgage chains
   Sometimes your sale and purchase can get snarled up in a mortgage chain through no fault of your own. A bridging loan can be used to break the chain and allow your purchase to go through, helping you and others stuck in the chain. Once your sale goes through, then you can repay the bridging loan.