What is Bridging Finance?
If you are looking to buy a new property but have not yet sold your existing home, you could find yourself struggling to access the capital to fund your new purchase.
In these cases, you could apply for what is known as a bridging loan, so called because it in effect “bridges the gap” between when you complete on the sale of your existing home and your new home. This short-term solution is normally offered for a period of a couple of weeks, and at a higher rate of interest than normal. Also known as a caveat loan, this type of loan can be absolutely crucial in times when there is crossover between the closing of property transactions. Indeed, bridging finance could be the difference between you being able to buy your next property or missing the opportunity altogether. At My Mortgage Force, we are able to help you with securing this loan if it’s necessary in order to facilitate your next property purchase.
Is Bridging Finance Right For Me?
These types of loans are designed to help property buyers complete on the sale of a new home, even if they have not sold their existing property.
If you need to move quickly due to a change in circumstance, such as a new job, this could be an ideal solution for you. It could also be that you are an investor or into house flipping, and therefore value a quick sale following renovations. Bridging loans can be useful, but they do have higher rates of interest and administration fees attached to them as well. Therefore, you should have a clear exit strategy in place, such as move to a new mortgage on your next property, before considering this type of loan.
It’s important to note that bridging financing should be viewed very much as a short-term temporary arrangement, and not an alternative to traditional lending. There are a number of costs that can quickly add up if you do not seek the right advice before entering into such a loan, which is why seeking help from a mortgage expert is so important.
Find out how we can assist
When dealing with a bridging loan, it makes sense to work alongside an FCA-regulated mortgage broker to avoid making any costly mistakes.
At My Mortgage Force, we have many years of experience guiding homebuyers and investors through the acquisition of new property, and have worked extensively with bridging financing as a result. We can look at your specific circumstances to determine if this short-term loan is really the best solution for you, and provide you with a number of different options available through different providers.
To learn more about bridging financing or about how MMF can assist you with practical, impartial advice, contact us today.