May 15, 2019
Property development is a booming industry even with the uncertainty of Brexit especially in the UK, but how do you get short term finance for your projects? The answer is a bridging loan, a bridging loan can easily be used as a form of short term financing which is secured against your property. This can be used in most cases whether it is a residential or commercial property. The normal bridging loan is used to get from one point of purchase to completion of a project but there are many other uses for such a loan from property development to sureties to purchase another property. Also, they can be used if a purchase chain breaks down as an emergency stop-gap to help alleviate financial pressure if a property purchase chain breaks down.
In recent times, however, Bridging Loan Market has exploded with many more people taking out such a financial tool in order to increase their wealth portfolio especially in the case of projects like property development. If you were to purchase a rundown property and do it up for sale or rental these kinds of loans could well be ideal for you.
Of course, they work with buy to let, industrial, commercial or domestic purchases of all kinds. The surety is in the property so there is little problem with all the hassle of a mortgage and are very much quicker to attain than long term loans with the paperwork that comes with them.
Looking around for the best deal is always the best plan and it needs to be mentioned there are penalties if you default on the loan especially if you have not studied the small print in your agreement so this needs to be taken into consideration at all times. Having said this they are becoming the fastest financial instrument which is favoured by both lenders (for security) and consumers for ease of lending in order to reach their goals.
Bridging Loans can also be tailored to the needs of the specific requirements of both parties dependant on requirements of any and all of the kinds of projects they have decided to embark on so are extremely versatile and “flexible” in their application. They will also offer the best value in terms of low-interest rates so long as everything goes smoothly and you complete the repayments in the allotted time frames set out on your contract with the banks or lender.
It is noteworthy if you make sure you have a good backup and exit strategy in place with your broker that if you are able to pay the remainder before the point of return you will be ahead of the game and more in profit than when you engage in your project so the incentive is there for you to get the best out of your bridging loan.