While they have been overlooked or looked down upon in the past, short term temporary loans have recently seen a resurgence in popularity. They can help close real estate transactions quickly, help a company maintain a cash flow until a deal goes through, and even keep construction or renovation problems on schedule when financing becomes an issue. Whatever the reason for your need, if unexpected circumstances have caused you to consider taking out a bridging loan, there are some things that you can do to ensure that the loan terms are as good for you as they possibly can be.
First off, don't expect rock bottom interest rates. While lenders offering gap financing have begun to offer very competitive rates, the risks involved with short term lending still mean that you'll be paying a higher than average interest rate. That said, be sure that you shop around a bit and compare rates. Some offer low introductory rates while others stick with a flat rate throughout the life of the loan. Find the fairest price possible, but remember that cheaper isn't always the best. Pay attention to the other factors that go along with your bridging loan to ensure that you aren't taken advantage of solely on the basis of a lower interest rate.
A bridging loan will also come with extra fees to help offset the risk. Again, there's really no escaping this but you can compare several loan terms to find the one that seems the most fair. Factor in both the fees and the interest rates to find the best deal for you. Next, be sure that the term limit is right for you. Gap financing is often written for six months to a year, but two year agreements are also available. Make sure that you have a good way to repay the loan, whether it's with a home sale, business deal, or permanent loan, and make sure that you'll have the money when the term ends. If you're unsure, you may be able to find a loan with an extension option.
Find out if there are restrictions on what you use your money for. Nothing is worse than being approved for a loan of fifty thousand pounds only to discover that you can't use it on what you intended. And be sure you understand the type of security you'll need to provide to get the loan. This will often include property or a home. Finally, check to ensure that there is no fee for repaying the loan early. Since a bridging loan is a short term loan, good ones won't have penalties for early repayment. Remember these guidelines and you should be able to get a great loan in no time.
Tuesday, 28 June 2011
Tuesday, 21 June 2011
Bridging Loans- Buy a New Home Before Selling Your Old One
So many of us have homes to sell, and so they can not relocate to a brand new one till they have finished the sale in their old home. This reasons many of us to lose out on the home we desire because they are ill-prepared for what they are getting into. However, with bridging loans, if someone should wish to buy a brand new home while waiting for their old home to sell they can, as long as they can prove they are worthy of the loan in the first place. Bridge loans are easy and available for a variety of needs, together with real property purchases while other transactions are pending. If you find your dream home you don’t need to wait, a bridge loan is the perfect solution.
Finding bridging loans is not hard. You can find many banks that supply these lending solutions, however you will have to be forewarned that banks can take up to 6 weeks to approve your application for a bridge loan. Private lenders are the most productive option, however they’re now not easy to get to. You must have a broker who can work with private lenders for you so that you could get the loans that you simply need. The good points of being with i private lender is you can have your loan approved in as little as 10 days.
Typically, approval occurs in less than 24 hours with a individual lender, while it could take a financial institution far longer to even let you know that you are eligible for their bridging loan. When you wish to look for a brand new home, you have to act quickly to get the one you want. The worst factor is to be waiting for approval and have someone else take the home that you’ve been dreaming of. With a bridge loan from a private lender, you won’t have that problem.
Once your old home sells, you'll be able to repay your bridge loan and finalize your loan for the brand new home in the event you haven’t already. Bridging loans are basically designed to get you what you want till other financing strategies come through for you. Using a bridge loan to shop for a brand new home while the sale of your old house is pending is an effective way for you to get the home that you want, without reference to whether your old home has sold or not, and will provide you with many extra options for choosing your next home than you could possibly have otherwise.
Finding bridging loans is not hard. You can find many banks that supply these lending solutions, however you will have to be forewarned that banks can take up to 6 weeks to approve your application for a bridge loan. Private lenders are the most productive option, however they’re now not easy to get to. You must have a broker who can work with private lenders for you so that you could get the loans that you simply need. The good points of being with i private lender is you can have your loan approved in as little as 10 days.
Typically, approval occurs in less than 24 hours with a individual lender, while it could take a financial institution far longer to even let you know that you are eligible for their bridging loan. When you wish to look for a brand new home, you have to act quickly to get the one you want. The worst factor is to be waiting for approval and have someone else take the home that you’ve been dreaming of. With a bridge loan from a private lender, you won’t have that problem.
Once your old home sells, you'll be able to repay your bridge loan and finalize your loan for the brand new home in the event you haven’t already. Bridging loans are basically designed to get you what you want till other financing strategies come through for you. Using a bridge loan to shop for a brand new home while the sale of your old house is pending is an effective way for you to get the home that you want, without reference to whether your old home has sold or not, and will provide you with many extra options for choosing your next home than you could possibly have otherwise.
Wednesday, 15 June 2011
Bridging Loan – Applying, Qualifying, Using
Perhaps you're an individual hoping to buy a new home but still waiting for your old one to sale, you may have difficulty securing a traditional type of home loan. You'll likely need a good down payment, one that you won't have until your first home sells. Or maybe you're a business owner with a huge deal set to close in a few months but in need of cash flow for your business right now. For these problems and others like them, taking out a bridging loan can be the best way to get the finances that you need quickly.
In order to apply and qualify for a bridging loan, you'll have to prove that you will have the means to repay the debt. Most loans of this type are written for six months to two years, with less than a year being the average. When the time is up, the loan will have to be repaid in full. If you're taking out a loan for a new home, you'll likely have to put up some type of collateral against the loan and show that you can repay the loan even if your home doesn't sell by the end of the loan period. Of course, small short term loans of just a few thousand pounds can be given as well and will be easier to qualify for.
When you take out a bridging loan, you can expect to pay more fees and charges than you would with a normal loan. And it is also very likely that your interest rates will be higher than a traditional loan will be. But there's a good reason for this, and that is that the loan company is taking a bigger risk by loaning you the money in this short term manner. But it is well worth noting that unlike many other types of loans most of these loans don't charge you a fee or penalty if you pay back the loan early.
There are plenty of other uses for gap financing as well. Construction firms often use them in emergencies where other financing fails but a project needs to move ahead. And individuals may need them to take advantage of unbeatable deals that are only offered temporarily. Whether you're the owner of a business who needs to buy out your partner quickly or an individual who just found the deal of a lifetime on a home, using a bridging loan can help solve your issue and tide you over until you can secure a more permanent form of financing.
In order to apply and qualify for a bridging loan, you'll have to prove that you will have the means to repay the debt. Most loans of this type are written for six months to two years, with less than a year being the average. When the time is up, the loan will have to be repaid in full. If you're taking out a loan for a new home, you'll likely have to put up some type of collateral against the loan and show that you can repay the loan even if your home doesn't sell by the end of the loan period. Of course, small short term loans of just a few thousand pounds can be given as well and will be easier to qualify for.
When you take out a bridging loan, you can expect to pay more fees and charges than you would with a normal loan. And it is also very likely that your interest rates will be higher than a traditional loan will be. But there's a good reason for this, and that is that the loan company is taking a bigger risk by loaning you the money in this short term manner. But it is well worth noting that unlike many other types of loans most of these loans don't charge you a fee or penalty if you pay back the loan early.
There are plenty of other uses for gap financing as well. Construction firms often use them in emergencies where other financing fails but a project needs to move ahead. And individuals may need them to take advantage of unbeatable deals that are only offered temporarily. Whether you're the owner of a business who needs to buy out your partner quickly or an individual who just found the deal of a lifetime on a home, using a bridging loan can help solve your issue and tide you over until you can secure a more permanent form of financing.
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