Different Types of Bridging Loans for Property

What is a Bridge Loan?

Oftentimes one wants to make a purchase or a transaction and sells off its existing property or other asset to collect the funds needed to make the purchase or transaction. But the sale may not happen immediately and may require some time to go through. In that time period they are left without the funds to make the purchase or transaction.

In such cases they can take the help of a bridging loan which will help to cover at least a part or even the full cost of the purchase or transaction. They can easily repay the lender who has given the bridging loan to them once their sale goes through and they receive the funds from it. This interim loan is called a bridging loan.

Bridging Loans for Property

For a bridging loan London is one of the most common choices. This is because London is full of reputable lenders who provide bridging loans at low interest rates and very minor collateral requirements. The most popular form of bridging loans in London are property bridging loans.

There are various kinds of property bridging loans. Some of them are -

1. Bridging Loan for Upsizing

Sometimes the circumstances are favourable to purchase a bigger and more beautiful house. Or maybe the children should be sent to a better school and live in a better neighbourhood, which again requires relocation. Suddenly the exact house that you were visualizing appears for sale. But it will take a long time to sell your current house, longer than you are prepared to wait. In such a case you can take the best bridging loan available to purchase that house.

2. Bridging Loan for Downsizing

Sometimes it does not matter if your current house is bigger or better than your future one. Maybe the government has carried out a project which will mean a new flyway or hospital very close to your house which will bring a lot of noise or traffic. Or maybe the neighbourhood you live in has suddenly grown unsafe. In such a case you might want to quickly purchase any available house, even if it is smaller. It can take a long time to find a buyer for your current house for the rate that you want to sell it for. In such a case you can take the best bridging loan available to purchase a new house.

3. Bridging Loan for a Property Lease Extension

Maybe the leasehold on your property is approaching its deadline. Or maybe you want to purchase a property with a relatively short lease and are finding it difficult to get a mortgage. If you have already talked to real estate agents, you’ll know that the leases on properties in London can put a big dent in anyone’s budget. Since you can not wait to gather the funds for too long because in that time the value of your property will decrease drastically, you should take the best bridging loan available to purchase a new house.