It is amazing to find your dream home for which you have utilised years in savings. Of course, you would never like to miss the golden chance of buying your dream home. To own that place, you have to make sure that you will not fall short of funds. However, investing in a property is not always easy as you cannot be sure whether you afford the cost of a house or not.
In the process of buying a home, falling short of funds will break your heart. However, there is nothing you should be worried about. You can seek out for the bridging loans if you do not want to be disappointed. The loan will help you bridge the financial gap between the purchase of new property and selling of your existing property. In fact, you can complete the purchase of a new house without selling your existing one.
A Glance at Salient Features of Bridging Loan
Availing these loans will be a good choice if you want to finance a new property. Generally, the alternative falls under the category of secured loans which means the approval is guaranteed. To understand why you should go for these loans, let’s take a look at their salient features:
- Immediate disbursement of cash to buy a new land without selling your existing property.
- Affordable instalments with competitive APR.
- No tedious formalities.
- Zero processing fee.
Nowadays, finding out the low rate loan deals is not a tricky task. You can check out for the bridging loan calculator to find the best deal.
Whom Are the Loans Aimed At?
After considering the features, you must be keen to know who can be eligible for these loans. Basically, the loans are aimed at both salaried and unemployed individuals. But, they must have a valuable asset to place against the loans. Being a landlord, you are eligible to take this loan. In fact, there is no obligation to use the loan for residential purpose only. Fortunately, business owners can also take the advantage of these loans.
While shopping for the loans, most people start worrying about the credit limit they can borrow. Generally, the amount you can borrow is not fixed. In short, the collateral you are placing will decide the how much you can borrow.
Main Categories of Loans
Open and closed bridging loan will be the main categories. Usually, there is a minor difference between the two. Open bridging loan has a longer procedure and allows the borrowers to stretch the repayment tenure. But, this category of loan requires you to pay more interest than the closed bridging loans. The closed bridging loans are different in the context of structure as there will be a fixed repayment date.