Bridging Finance Explained…

Bridging finance is designed to be used as a short term solution when it comes to property purchases. Our lenders can provide a short term loan, secured against real estate, to help you get to where you want to be.

When you take out a bridging loan, a ‘charge’ will be placed on your property. This is a legal agreement that prioritises which lenders will be repaid first should you fail to repay your loans. Both a first and second charge bridging loan take your property as security in case you default on repayments.

Typically, if you still have a mortgage on your property, the bridging loan will be a second charge loan, meaning that if you failed to meet repayments and your home was sold to pay off your debts, your mortgage would be paid off first. But if you owned your property outright, or you were taking out a bridging loan to repay your mortgage in full, you would take out a first charge bridging loan. This means that the bridging loan would be repaid first if you fell behind with repayments.

When could bridging finance be useful?

  • Auction purchases.
  • New trading premises.
  • Unmortgage-able properties.
  • etc

The most important aspect of a transactions involving bridging finance is the exit strategy. We will work together to set out a clear and concise route to paying back the bridging loan.

To find out more information get in touch today via the form or calling 0800 656 9668

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