When you plan to shift to a new house and have planned to buy your dream mansion for it, things must be very rosy for you. But if even a slight lack of coordination occurs between the sale of your earlier house and the purchase of the new one, you can be facing a lot of problems. To cover up this scenario, you can take up a residential bridging loan.
The borrower of these loans may land up in such a situation in two cases. First, if there is delay in the receipt of funds from the sale of your earlier property. Then the borrower may require money to cover the gap. The other way this can occur is that the buyer of your earlier property backs out at the last minute when you have already paid some amount for booking the new property.
However in both these situations, the borrower can easily go for this bridging loan for residential purpose. This loan is available to the borrowers for a short term of 1-12 years. During this time, the borrower usually is able to arrange for the money as he can sell off his property easily in this situation.
The loan is available to the borrowers in the open end form and the closed end form. Open end form is available to those borrowers who have not yet sold their earlier property but are looking for a buyer. Closed end form is useful in those cases when the borrower is just facing a delay in receipt of funds.
These loans are secured which requires the new property to be pledged as collateral till the loan is repaid. The borrower can use the property meanwhile. Also, these are interest-only loans which require the borrowers only to pay the interest during the term and the principal at the end of the term.
With a , the borrowers can get money in an emergency situation. No problems are faced by borrowers now as far as their residential property is concerned.
