What Is Residential Bridging Finance?
Individuals who seek residential finance for a purchase of property, for example, are often faced with two options; either to take out a standard mortgage and incur the associated costs (which may include high upfront charges), or to use bridging finance and pay fees that are lower. The post will provide useful information on residential bridging finance and why it’s better than taking out a standard loan.
What is residential bridging finance?
Residential bridging finance is a type of short-term loan that is typically used to help borrowers bridge the gap between the purchase of a new home and the sale of their old home. This type of financing can be useful for borrowers who need to move quickly and do not have the time to wait for their old home to sell before buying a new one.
Residential bridging finance can be used for a variety of purposes, including:
– Helping to fund a deposit on a new home
– Paying off any outstanding debts on an old home
– Covering the costs of renovations or repairs on a new home
– Helping to pay stamp duty on a new property purchase
The terms of residential bridging finance can vary depending on the lender, but typically loans are repaid over a period of 12 months or less. Interest rates on these types of loans are usually higher than those offered on standard mortgages, so it is important to compare rates from different lenders before taking out this type of financing.
Why is it better than taking out a standard mortgage?
There are a number of reasons why residential bridging finance may be a better option than taking out a standard mortgage. First, with a standard mortgage, you may have to wait weeks or even months for approval. With residential bridging finance, you can often get approved within days.
Second, if you’re looking to buy a property quickly, residential bridging finance can help you do that. Standard mortgages typically have longer closing timelines, so if you’re looking to close on a property ASAP, residential bridging finance may be the better option.
Third, residential bridging finance can be used for a variety of purposes – not just buying properties. You can also use it to refinance existing mortgages, consolidate debt, or even make home improvements. There’s more flexibility with residential bridging finance than with standard mortgages.
Fourth, the interest rates on residential bridging finance are often lower than the interest rates on standard mortgages. So if you’re looking to save on interest costs, this may be the better option for you.
Finally, if you’re at risk of foreclosure or your property is in need of repairs, residential bridging finance can provide the funds you need to avoid foreclosure and make necessary repairs. This type of financing can give you the time you need to get your finances in order and keep your property.
What are the benefits of residential bridging finance?
Residential bridging finance can be an extremely beneficial form of short-term funding, particularly if you are looking to purchase a property quickly. Some of the key benefits of this type of finance include:
-Access to quick and flexible funding: One of the biggest advantages of residential bridging finance is that it can provide you with access to quick and flexible funding. This can be extremely helpful if you need to purchase a property quickly or if you are facing a time-sensitive situation.
-A range of repayment options: Another benefit of residential bridging finance is that it offers a range of repayment options. This means that you can tailor your repayments to suit your individual circumstances.
-Competitive interest rates: Residential bridging finance typically comes with competitive interest rates, which can save you money in the long run.
If you are considering taking out residential bridging finance, then it is important to speak to an experienced broker who can assess your individual circumstances and advise on the best option for you.
What are the disadvantages of residential bridging finance?
The main disadvantages of residential bridging finance are:
- The interest rates charged on these types of loans can be high, which can make them expensive to repay.
- They are typically only available for a short period of time, which means that if you need to borrow money for a longer term project, you may not be able to do so with this type of finance.
- Residential bridging finance can be difficult to obtain if you have a poor credit history.
Conclusion
Residential bridging finance is a type of short-term loan that can be used to help you buy a property before your current one has sold. It can be a useful option if you need to move quickly or if you’re struggling to get a mortgage from a traditional lender. However, it’s important to remember that residential bridging finance comes with risks, so make sure you understand the terms and conditions before signing up for a loan.
