Short Term Bridging Loans UK—buy property in hard times
You have set your eyes on a dream house that is to be bought immediately otherwise anytime others may grab it. But you don’t have sufficient finance at hand. To generate funds you want to sell your old house but its buyer will take two months to buy it. What to do? Short term bridging loans UK pulls you out of the tight money situations like this one by making available the much-required money the other day.
Short term bridging loans UK, as is clear, is a loan taken for duration of a week to six weeks and a maximum of two years. In these few weeks or days, the borrower after availing the loan buys the new house or any other property from the borrowed money. He then pays back the loan to the lender when he is able to sell the old property.
The amount you can borrow under short term bridging loans UK generally ranges from £25000 to £500000.One can borrow a higher amount provided the collateral placed with the lender is of high value. Under short term bridging loans UK, lenders provide the borrower an amount that is 65 percent of the value of the property put as collateral. The lender when deciding over the loan amount does not consider purchase price of the property. Any property like your home, office or business is worth putting as collateral with the lender when asking him for the bridging loan.
One significant feature of the short term bridging loans UK is that it does not require the borrower to pay any installments. Instead, the borrower pays the interest only during the term of the loan. He then returns the principal borrowed amount when he sells the old property in the said duration.
However, because it is loaned for a very short period, the short term bridging loans come with a slight disadvantage of a high interest rate. The intention of the lender in short term bridging loans remains to earn as much money as possible through the interest. The borrower on his part can make attempts to reduce the interest rate by comparing interest rates of various lenders online.
But considering that the borrower needs the money urgently, he seldom sees a high interest rate on short term bridging loans as a huge burden.
As it is designed to be an instant access to the borrowers, the lenders normally approve short term bridging loans UK within five days of the application. Bad credit score of the borrower will not count much in case of this loan, as the lender has secured his money by taking his property as collateral. Short term bridging loans UK is thus the best available finance to a new property buyer when he faces a tight money situation. But one should make efforts to shop around for a lower interest, which generally remains very high.