Residential bridging loans are short term, interest-only loans generally used to help you meet a pressing financial need when dealing in the property market. Applications are often decided on the value of the property and your exit strategy, more than your ability to meet payments.
When can you opt for Residential Bridging –
- Broken property chains. When a buyer pulls out, your offer on your next home and the deposit can be put in jeopardy. A Bridging Loan can tide you over until your home is back on the market and under offer once again
- Buying a second property before selling the first
- Auctions. Usually, once an offer is accepted at an auction and a 10% deposit has been paid, there is a 28-day period to complete the purchase. But at auctions you might go in without pre-organised finance. A Bridging Loan can be organised so you can pay for the house within the 28 days and give yourself time to sort out a longer-term loan
- Short lease. It could also be used if, for example, you wanted to buy a property with a short lease. You could use the Bridging Loan to buy the property, then add value by extending the lease. This would provide a valid exit strategy
- Refurbishment projects. You can use it a Residential Bridging Loan to refurbish a property before full capital is available