How does residential bridging finance work?
A residential bridging loan is designed to cover funding gaps over a relatively short term compared to traditional lending such as a mortgage or standard loan. They’re called bridging loans because they’re designed to bridge the gap between certain events or situations. Most of the time our clients use these types of bridging loans and finance for renovating houses or for other types of property development. For those looking to start a development, many use bridging loans or finance to buy materials, purchase properties at auction or to cover a chain breaking down.
Bridging loan examples
There are any number of reasons why our clients may use bridging loans or finance. Here are a few examples of what you may use bridging loans for, however, to see how they may be able to help you. For example, to raise quick funds for a project if somebody needs access to cash quickly. Some use bridging loans for extending the lease on a property before selling it, or to fund the extension or refurbishment of their house. Many of our clients use bridging loans or finance to purchase a house at auction, due to the fact the funds must be paid within 28 days of the auction for the sale to complete. Some use them to complete the purchase of a house before there is sold and some use bridging loans or finance to pay debts when they fall due. Again, though, there are many reasons why our clients use bridging loans or finance and these are just a few examples, if you’re unsure about whether this type of loan is right for you simply speak to one of our brokers who are experts in this type of finance.
Is residential bridging finance available to anybody?
Theoretically yes, it is, however, there are some things you’ll need to qualify. This type of loan is different to a traditional bank loan in that the lenders aren’t quite as interested in your personal credit history as much as your track record in property development, your plan and how you intend to repay the loan, as well as the security you’re able to offer. Broadly speaking, however, anybody could get a bridging loan. The best advice is to speak to one of our brokers or one of our experts and they’ll be able to advise you on exactly what you’ll need and whether you qualify for a loan.