Know More Secrets About Bridging Loan That Could Help You Buy A New Property A bridging loan, which is also known as short-term financing is used to raise money for purchasing new property. It is usually difficult to sell one property while buying another property that generally leads to a financial gap. It is mainly meant for temporary financing of real estate until long-term finance is arranged. Many people avail bridging loans to fill the finance gap while buying a property, business, or payment of renovation. Few people use these loans for buying a property at an auction. Commercial real estate transactions require these short-term loans to bridge the cash gap. Bridging loans are secured on the property. The type of property that is accepted as security includes:
Residential properties Auction properties Commercial properties Retail shops Overseas property Development sites and plots that having planning permission
Some heavy machinery, business equipment an inventory can also be used as collateral. These loans can be obtained on the new property and the second mortgage can be applied for the property being sold. Property evaluation plays an important role in bridging loan as they are offered on the value of the property, but not on the purchase price. The approval of the short-term loan is the first step of the availing it. The loan amount generally depends on the lender. Some may offer a very low price, while others would offer a higher value. The higher amount of bridging loan can be arranged but it takes some time for the approval and would require properties of such level that could act as collateral. The bridging loan term can be anywhere between a week and six months. Few companies offer a maximum period of two years. This loan can be made available within 24 hours of application if all the necessary documents are submitted at the time of application. It is always better to avail suck loans from good companies, as they will not have any hidden clauses.