Bridging & Short Term Property Finance Return to all services
What is Bridging and Short Term Property Finance?
Bridging loans are short term finance. They bridge the gap between a debt needing to be repaid and the funds being available to pay the debt. A good example of this is purchasing a property that is not habitable or needs converting. A house may need to be refurbished to make it habitable or a landlord may wish to obtain short term funds to convert a property into apartments. As soon as the refurbishment or conversion is carried out, longer term funding by way of a mortgage or a commercial loan can then be arranged.
The bridging loan is secured, so in this scenario it is likely to be secured against the new property. Typically a deposit of 25% would be needed unless you have other security available to offer the lender. The interest rates on short term finance are high, but could be worth considering provided that there is an exit strategy to repay the loan.
If you need a mortgage to repay all or part of the bridging loan, it is very important that before the loan is taken out, that you are as certain as possible, that the required mortgage or commercial loan will be approved. Otherwise you will not have the funds to repay the short term finance and run the risk of losing your new property.
If you are considering a bridging loan and would like more information we are happy to assist. If you decide to proceed we can explore the options open to you, including those available through Dupree Commercial Finance Ltd., to find you a competitive deal.