Every problem has a solution, they say, and short term bridging loans are the solution to quite a lot of problems. Most of these relate to occasions when you need money in a hurry and there’s nowhere else you can get it from.
So what are the problems you might face, that short term bridging loans might help to solve? Here are some examples.
• You are selling your house and buying another one – you’ve had your offer accepted on the new house but haven’t yet had a firm offer on the old one. You know the seller of the new house won’t wait for ever and you’re scared of losing it. You can use a short term bridging loan to complete on the new house and pay it off when you sell your own (but you need to be pretty sure you will sell it!)
• A property you are keen to buy has some sort of structural problem so the mortgage companies won’t lend on it. You are keen to do it up but need the finance. You can take out a short term bridging loan to cover the purchase price plus the cost of repairs. Once the house is repaired you can get a standard mortgage based on the increased market value, which should provide enough to pay off the bridging loan.
• You have spotted a property at auction that is a great bargain – but the money has to be paid in full within 28 days and you can’t arrange your regular mortgage in time. Short term bridging loans were invented exactly for this type of situation! The application process is very simple with minimal fuss, and often you can have your money within a few days. As soon as the regular mortgage is in place, you can repay the bridging loan.
• You own a business and urgently need new equipment. Your lender has agreed a commercial loan, but the supplier insists on payment before the funds are going to be available, otherwise you lose the order. Don’t panic – a short term bridging loan will enable you to pay the supplier and you can repay it when you get the funds.
• Although short term bridging loans are secured on property, they don’t have to be used for buying property. You can a short term bridging loan for any occasion when you have an urgent need for cash – for instance, a big unexpected repair job. Of course you do need to be clear where your repayment funds are coming from – you may be able to remortgage the house or release some equity.
• About to be repossessed? One possible solution is to refinance your house through a short term bridging loan, with the repayments rolled into the loan amount. After you have had this a few months you will no longer be in an arrears situation, so you should be able to remortgage – provided of course you have an income to repay the mortgage.
These are only some of the situations where short term bridging loans can come to your rescue! It’s true that these loans have a higher interest rate than standard loans – but as the rate is only for a short period, it can be well worth it in terms of the benefits. So next time you are in urgent need of immediate cash, there’s no need to be nervous of short term bridging loans – they’re there to help you!
If you would like to discuss bridging loans please visit our main website http://enhancedwealth.co.uk/commercial/bridgingfinance.htm or call 0800 316 5756