You can take bridging finance on either a second or first charge basis. Most lenders use closed bridging loan. This means that you are given a fixed term to the contract. This is applicable when the completion dates for purchasing new property and selling it is known. On the other hand, an open bridging loan is when the term of the contract is not fixed.
Nowadays, there are bridging loans for all types of clients ranging from individuals to companies. Thus, if you have excellent credit status but it has become difficult to obtain loans and mortgages you can apply for these loans. Also, if you are self-employed and have a poor credit history, you can qualify for these types of loans. Usually, all forms of security are taken into account, from commercial, semi-commercial, and residential properties or land. The truth is that properties can be partially or fully developed. Also, they can be in need of renovation or in perfect condition. You can take a bridging loan on a wide range of securities and clients.
Traditionally, bridging loans were mainly used to buy a new home before getting a buyer to purchase the current property. Over the years, this form of finance became quite popular in the fast-moving and buoyant property market. Another factor that contributes to the immense growth of these types of loans is the ever-increasing demand for home ownership. Nowadays, the uses for bridging loans are extremely varied.
In most cases, bridging finance is used for development of properties including self-build projects, property conversions, and site purchase. The good thing about these loans is that they can help complete purchases quite quickly. For instance, if you secure the property at an auction, you will only have 28 days to complete the purchase. Moreover, they are cost-effective for people wishing to get the property for resale and refurbishment.
Versatile and Cost-Effective
For most clients, they are not aware of where they can get financing and to what extent. It is a good idea to carry out extensive research to know answers to these vital questions. This is necessary to help them make informed decisions and plan ahead. You can get bridging loans from non-mainstream lenders to high street banks. Usually, the banks are a bit slower as compared to non-mainstream lenders. For instance, the normal turnaround is just seven working days.