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What is the difference between a Bridge Loan and a Home Equity Loan?

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Sometimes you dream property may come an inopportune time, and you may not be in the position to sell your existing property. This could be for multiple reasons ranging from not wanting to sell the existing property at all to the current property being undervalued or stuck in a sale chain. 

However, if you are facing this type of issue you can easily overcome it by making use of a bridge loan or home equity loan.

Whilst the purpose of the both a bridge loan and home equity loan are the same, there is still a huge difference in between them.

In this blog post we hope to try and help distinguish to two to help you choose the best type of loan for your purpose.

What are Bridge Loans and what are their advantages?

Bridge loans are a short-term finance solution, these are more often than not, used as a temporary solution to help purchase a new property by securing the loan funds against the equity held in the existing property. Once the existing property is sold and the funds released, the loan and all its charges would be paid off in full.

Bridge Direct in UK, will offer instant bridge loan, if you are eligible. Below are the few advantages of the Bridge loans:

Flexible Mortgage Repayment Options

With bridge loans you don’t need to worry about making regular monthly payments because full settlement is made when the loans are drawn down. When you are desperately looking for funds the bridge loan lender bridge Direct provides instant cash flow.

Whilst bridge loans are usually used for property transactions, they can be extended to fit for any kind of business requirement. For example, there has been an increasing trend for business to use bridge loans for;

  1. Paying large tax bills
  2. Kick starting new ventures
  3. Funding waning projects
  4. Maintaining cash flow

No set criteria and instant loan approval

The amount you can borrow for your bridge loan will depend upon the equity held in the property being used as the security. Bridge loan experts Bridge Direct do not have a set criteria, will accept 1st and 2nd charges on properties and will guarantee an instant decision on all bridge loan applications.

Even if you have bad or adverse credit, Bridge Direct may have a deal for you!

No monthly repayments

With bridge loans the loan is paid in full at the end of the loans term. This means you don’t need to worry about making the regular monthly repayments you would with a standard bank loan or mortgage.

What are Home Equity Lines of Credit?

With a home equity line mortgage the collateral is the capital held in your home. The major difference between this and a bridge loan is that you are not given the complete borrowed amount up front in a single lump sum.

With home equity line finance you will be given a maximum ceiling value for the amount you can borrow from the property. The borrower would then be able to borrow the funds as and when they need it, much like you would with a credit card.

The interest rates on home equity line of credit and bridge loans are very similar. However, if you have bad or adverse credit, then the interest rates held on home equity line of credit will sky rocket astronomically.

Home equity lines of credit must also be taken out before the property is put up for sale, meaning that the borrower needs to plan ahead. This is doesn’t apply to bridge loans which can be taken out at any time, and do not require the property to be put up for sale at all.

Generally, a home equity line of credit loan would use to fix the home repair issues and other recurring expenses before the home is put up for sale.

So, if you are looking any kind of bridge loan in the UK, contact Bridge Direct, you can call them on 020 3126 4969 or even apply online at www.bridge-direct.com.

When you contact Bridge Direct you will be speaking to the decision maker, and no middle men. Bridge Direct are direct lenders, with access to over £12 million in funding, they accept 1st and 2nd charges and have no set criteria. When you apply for a bridging loan with Bridge Direct you will be guaranteed an instant decision on your application and may be eligible for a loan even if you have bad or adverse credit history.
Tags: Bad Credit Finance, Bridge Loan Lenders, Bridge Loans, Home Equity Lines of Credit

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