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Lending Secured on your Main Residence
There are two main types of this form of finance.
All forms of bridging loans are short term, usually up to 12 months. The main reason for borrowing in this form, is to help plug a funding gap between the sale of the borrower’s current residential property and the one they are looking to purchase. Where a property is taking too long to sell, and equity in that property which is to be used in the purchase remains tied up, then in order to save the purchase from falling through, it is possible to take out a bridging loan for the value of the equity, which will be repaid later from the sale of the current property.
There are other occasions when a Bridging Loan might be needed quickly. For example, when a property is being bought through an auction, there is often insufficient time to arrange a long-term loan, and bridging finance is in ideal form of finance to assist the borrower complete their transaction.
With all forms of bridging loans, the lender will want both a clear understanding, and to be confident in the borrower’s proposal to repay the loan either through sale or, by re-financing on to a longer-term loan at the outset. At Try Financial we work closely with all our clients to advise both on the initial purchase bridging loan, and the chosen exit, and will ensure everything runs smoothly.
Lending Secured on an Investment Property
Usually, having found an investment property that requires some improvement or conversion work before it is to be either sold or let, the best way to fund the purchase of the property, is by using a re-furbishment bridging loan. This provides the customer with the time and flexibility to do what’s needed and, in many cases, receive funding from the lender for the cost of the works. Money to support the works is almost always released in stages and will need a surveyor to approve what has been carried out. Refurbishment projects can vary from relatively minor work such as kitchen and bathroom replacement and re-decoration, to major conversions, property layout changes and extensions. Whatever the scale and nature, a Bridging Loans can be tailored to fit and help bring many projects to a successful conclusion
Sometimes a property sale is at a price below market value. The reasons for this are often many but, bridging funding is available to help buy these properties initially, at a 100% of the discounted price, depending on scenario and lending criterial. These opportunities we recognise as being too good to miss, and we specialise in helping customers in this situation.
Bridging Loans in all forms involve a term of up to 24 months, and interest is either paid in advance or paid monthly. When paid in advance, the borrower only pays for what they use, and if the loan is repaid therefore before the term ends, then the lender refunds what has been overpaid. Loans are available for property transactions in England and Wales and also Scotland. There is usually an arrangement fee, and occasionally an arrangement fee on exit.
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