BRIDGING LOAN FAQ’s.
A Bridging loan is short term finance for those interested in buying property, but still in the process of selling their present property and therefore unable to arrange the funds needed for the purchase of the new property. Bridging loans can in most cases help to bridge the gap between buying a new property and selling you’re existing property. Whether the reason for you wanting to buy is either personal or business you can benefit from a bridging loan from a principal lender.
Here are the answers to some of the frequently asked questions on bridging loans:
1. How do I get a bridging loan quickly?
There are a number of financial institutes and principal lenders on the internet who can provide fast bridging loans. A reputable lender will help you to get a bridging loan quickly, easily and with the minimum of fuss. A list of information needed to obtain a bridging loan can be found below.
2. What is the next step after applying for the bridging loan?
Once you have applied for a bridging loan, if your application meets with the lenders criteria a decision in principle is given to you. Normally lenders will get back to you with a decision either in writing or over the phone very quickly.
3. How soon after application can the amount be transferred to my account?
A good principal lender can arrange the amount required in a period as short as 48 hrs if a valuation has been carried out and all searches and enquiries are in place.
4. What are the interest rates?
The interest rates of bridging loans are much higher compared to other forms of loans. However, interest rates may vary from lender to lender. There are however, lenders who may provide bridging loans at comparatively lower rates of interest.
5. How much can I borrow?
The amount which you can borrow will depend on the value of the property.
6. How much repayment time will I be given?
Borrowers should always remember that Bridging loans are short term loans. Therefore the repayment times are shorter than other types of loan. The usual loan time is between 1 – 12 months, however, in some cases an extension of time can be granted.
7. What if the repayment is not made on time?
If the repayment is not made within the fixed time period, and no provision has been made with the lender for an extension of time, or if an exit from the bridge cannot be put into place, the lender may as a very last resort have to re-possess the property in order to recoup the outstanding debt, but this step is never taken lightly.