Residential Bridging Loans - Own a New Home in Short Period

By: Eva Baldwyn

While you are thinking of buying a new home, you may be facing shortage of required money. Though you can sell the old home, but it will take time as you are not getting the desired price in these days. This sort of crisis can be met with , as these are especial loans for the purpose. However, you should borrow the money only after taking all its aspects into account.

These are secured loans, requiring you to pledge your any valued property as collateral. The lender will approve an amount of around the value of the property. This way, you can borrow greater amounts for purchasing a new home.

Residential bridging loans are short-term financial arrangement. This implies that the money is borrowed for few weeks to a year. It is when you have found the money from own source like by selling some old property that you can repay the principal amount in one time. Until then, you have the option of making the interest payments only. The lenders would like to assess your repayment ability before approving an amount.

However, despite being secured loans, interest rate is generally higher. This is because these are short-term loans.

Usually, the lenders do not worry about the borrowers' bad credit history of late payments, defaults or arrears in providing these loans, as they can recover the loan on selling the borrower's property in case of payment default. The interest rate may be a little higher for such people.

It is advisable to make an extensive search for right residential bridging loans. Apply for the rate quotes to find a select list of such lenders. You should compare the rates as well as the additional charges. Make sure that you repay the loan amount on due date or you will end up making high interest payments.

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