Residential Bridge loans are a short-term, stop-gap funding solution. This type of bridging loan is mainly used during property transactions, whereby the ‘Bridging Funds’ are secured against a property as a short term finance option until the sale completes.
The bridge loan funds are used as a stop-gap measure used to 'bridge the gap' until a more suitable, longer term financial solution like a mortgage or loan can be secured. By using a bridge loan like this enables the borrower to secure the property they desire, allowing exchange and completion to occur much faster, saving time and legal costs in the process.
However, residential bridge loans are not exclusive to property transactions and can be used for any type of business application as a short-term funding solution when cash flow is an issue.
For example short term bridge loans and bridging finance can be used for;
A bridging loan or bridging finance will generally carry a higher interest rate when compared with a long term mortgage or bank loan, but when you consider the time and money they can save, this higher interest rate can soon be negated.
For example, when using a residential bridge loan to purchase a property at auction;
Residential Bridge Loans will be designed to help the borrower exchange and complete the purchase of a property before the borrowers existing property is sold. The funds are borrowed using equity held a property or asset owned by the borrower as security. This reduces the need for many credit checks and due diligence that is generally standard with a standard bank loan or mortgage.
Residential Bridge Loans are aimed at helping home-movers when there is reliance on a chain in the sale and completion dates of the properties. For example, the borrower may have a buyer ready for their property but they are awaiting the on a mortgage approval from the bank before they are able to complete. As the borrower will have a rough idea of when the buyer will get the funds a bridge loan is an ideal stop gap to fill this financial gap. Enabling them to complete quickly and pay the bridge off when the buyers mortgage is approved.
Residential Bridging Loans can also help when buying at auction or when trying to sell the existing property quickly after renovation. In this case the borrower may not even need to apply for a longer term funding solution, like a mortgage or bank loan. If the propert renovations are only superficial, by using short term bridge loans like this, borrowers can 'flip' the propety and sell it in a short space of time increasing profit and limiting monthly outgoings.
In the wake of the recent financial crises, banks, and building societies have grown more reluctant to lend, since then there has been a massive increase it the amount of Bridging Loan Lenders in the market.
The rate for these types of loans are generally higher when compared with a standard bank loan or mortgage; this is why Bridge Direct is here to help you through the process and get you the best possible deal. They will ensure that the short term bridge loans deal is ideal for you and your situation.
Short term Bridge Loans or Residential Bridge Loans are used for many reasons; these include (but are not exclusive to);
More recently, due to the recent financial crisis, it has become an increasing trend for the high street, and private banks to take much longer to process applications and even refuse credit for some larger home loans. Since then, Residential Bridge Loans, have become an easy solution to help the borrower get the funds they require to secure the property they desire, quickly and in most case more cost effectively.
Many borrowers now view Residential Bridging Loans as a simple, and in some cases cheaper, an alternative to mainstream lending. This is because direct access to the funds often help the borrower negotiate a lower cost on the property itself.
Crucially, it is important to trust the lender if you are new to this type of finance. This is why Bridge Direct are here to help make the process as smooth and painless as possible, and as they are lenders and not brokers can give instant decisions.
As a Residential Bridge Loans UK for both Commercial and Residential customers, Bridge Direct will have a bridging solution for your specific situation.
Overall, Residential Bridge Loans (or short term bridge loans) are aimed at those seeking to secure the property quickly, and normally looking to secure funds before a long-term mortgage can be secure. On the flip side property developers, which includes purchasing at auction, can find Bridging Loans invaluable, allowing them to secure these properties with little worry.
As Bridge Direct are a lender of short term bridge loans, they are not brokers! Bridge Direct have direct access to more than £12 million and therefore give the best possible deals for Residential Bridge Loans UK. Lending in throughout the United Kingdom, contact Bridge Direct to see if they have a deal suitable for your Residential Bridge Loans UK requirements.
Lending in throughout the United Kingdom, contact Bridge Direct to see if they have a deal suitable for your Residential Bridge Loans or Short Term Bridge loans requirement.