Time is money, especially when it comes to bridging loans.
The bridging loan market is a small but important section of the mortgage market. Designed to help people who need some extra finance in order to allow them to complete a property purchase, bridging finance is typically used by property developers who want to release cash from under-valued properties in order to move on to their next project.
Types of bridging loans
There are two types of bridging loans; open and closed. An open bridging loan can be difficult to arrange, because it means that you have not yet sold your current property, but want to buy another. A mortgage lender will want to make sure that you will be able to sell your property at the right price within a fairly short timescale so that they can recover the money they have loaned to you, and your bridging loan will usually attract a higher rate of interest.
A closed bridging loan applies where you have exchanged contracts on the property you are selling, and need a loan to tide you over the small gap between paying for your new property and completing on your current property. This type of bridging loan carries less risk for the lender because the money from your sale is guaranteed after exchange, and therefore it is easier to arrange and carries a lower interest rate.
Bridging loans for developers
Property developers make regular use of bridging loans to help them to buy their next property whilst the previous one is being sold. These are often closed bridging loan deals, but they can come with their own share of problems; one of which is how long it can take to arrange the original mortgage to buy the property, and then a re-mortgage in order to release any additional cash that's tied up in the equity of the property. For both loans, you will require a valuation, and you will need to wait for solicitors to prepare all the relevant legal documents. Most property developers want to get on with buying their next property as soon as possible, and don't want either the expense or the time that a dual-mortgage bridging loan can bring.
You can bring the waiting time down by choosing a new approach to bridging loans. Avoiding taking out a first mortgage, you can use the cash provided by Faster Bridging Finance to buy your property and then re-mortgage to get the full value from your property. What's left, less just one set of fees, is yours to invest in the next property deal.
Faster Bridging Finance has developed a new approach to closed bridging loans that saves you time, money and hassle. Developed specifically to help those who invest in property occasionally or who have large property portfolios and want to be able to get cash out quickly, the service uses a dedicated mortgage broker and conveyancing solicitor so that there are no hold-ups, just a straightforward bridging deal. To find out more about how Faster Bridging Finance can help you, order your Free report now.