It is not always possible to match up the dates of receiving payment of your home that you just sold, and making payment for the one you plan to buy.
Factually, payments get delayed and you can do nothing about them. The situation becomes frustrating, as you are temporarily out of funds and cannot secure possession of the new house. In such circumstances, bridging loans come in handy.
The loans enable a person secure a new property even before he receives payment for the previous one. By using this loan, you can safely move into a new home with your family, as there is no rush to hand over the keys of your present home.
These loans are also useful when you are yet to sell off your existing property and need funds to buy a new one.
However, you have to be careful when going for a bridging loan.
The interest rate is generally very high. Moreover, the loans are mostly available from independent lenders, who have their own terms and conditions.
Apart from the interest, there are several fees and charges, which you have to bear when signing up for a these loans.
Additionally, with a mortgage on the existing property, signing up for a bridging loan would mean additional burden of debt. You are required to continue paying the interest on loan. The principal is payable in full after the existing property is sold.
If you do not get the expected price or the sale of property does not happen within the this loan period then the situation becomes difficult. The lender might increase the interest rate and you will be asked to repay on principal and interest basis.
To conclude, Bridging Loans provides you the needed finance for the gap between selling your existing property and buying a new one. Nevertheless, if not planned with proper research, it can become a risky step for you.
Factually, payments get delayed and you can do nothing about them. The situation becomes frustrating, as you are temporarily out of funds and cannot secure possession of the new house. In such circumstances, bridging loans come in handy.
The loans enable a person secure a new property even before he receives payment for the previous one. By using this loan, you can safely move into a new home with your family, as there is no rush to hand over the keys of your present home.
These loans are also useful when you are yet to sell off your existing property and need funds to buy a new one.
However, you have to be careful when going for a bridging loan.
The interest rate is generally very high. Moreover, the loans are mostly available from independent lenders, who have their own terms and conditions.
Apart from the interest, there are several fees and charges, which you have to bear when signing up for a these loans.
Additionally, with a mortgage on the existing property, signing up for a bridging loan would mean additional burden of debt. You are required to continue paying the interest on loan. The principal is payable in full after the existing property is sold.
If you do not get the expected price or the sale of property does not happen within the this loan period then the situation becomes difficult. The lender might increase the interest rate and you will be asked to repay on principal and interest basis.
To conclude, Bridging Loans provides you the needed finance for the gap between selling your existing property and buying a new one. Nevertheless, if not planned with proper research, it can become a risky step for you.
