Residential Bridging Loan - Have Easy Access to New Home

By: Eva Baldwyn

You want to buy a new home but do not have sufficient funds at hand. Any delay in arranging the money can result in you loosing the home of you choice. In such a urgency, residential bridging loan can come to your rescue. These loans are especially helpful when selling old home in time becomes difficult.

For example you are let down by the buyer who showed intentions of purchasing your existing home but later the sale could not materialize for some reasons and therefore you now have no funds to buy the new home you have just located. The loan in that case will enable you to complete the new purchase on time.

Apart from enabling timely purchase of property, serve various other purposes as well. These loans can be used for temporary funding of a defective property till you repair it and than you can take a normal mortgage to repay the bridging loan. Business people can use these loans for overcoming a cash flow problem. Or, you can make an urgent purchase of a property at auction.

One can say that these are very short term mortgage. While both bridging loan and mortgage are secured against your property, the difference is that as against longer duration of say 25 years approved for mortgage repayments, the bridging loan carries short duration of few months to a year.

Another advantage is the loan is easier to avail. The lender usually approves it within one or two days. What is more, the lenders do not worry much about bad credit history of the borrower because collateral is in place.

However, these are costly loans. Lenders charge interest at higher rate which may go further up for bad credit borrowers. So, first take rate quotes of the lenders providing residential bridging loan. Compare the lenders for finding a suitable deal.

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