|
A bridging loan can be a very important tool in facilitating the acquisition of a new property. Perhaps you have just spotted a new house that fits your dream home specifications after searching for some time and you simply cannot afford to lose it. You need to raise the funds in time and you may risk losing this once in a lifetime deal. Before you take this type of loan facility, you need to be cautious. The loan has a higher interest and is very risky. There are a couple of things that you need to know before taking this option. Assessing Risk The first thing your lender will need to assess the risk and your ability to pay. This is particularly true for the ‘closed bridge’ type of bridge financing. A closed bridge will happen when the lender is approached after the property is exchanged. The interest rates are usually better and you will pay off the debt quickly and clear the loan. The open bridge type is when the buyer has not exchanged the property or put it out there in the market. Closed and Open Bridge Option The closed bridge option is much better for both you and the lender. The chances of the deal not going through later are much lower compared to the closed option. The lender will be easier on you. With the open bridge financing option, the buyer will ask many questions and want to see the offer. Your personal circumstances, such as whether you are taking the mortgage with a Visa may be considered in order to determine the level of risk. You need to ensure that you have secured the mortgage before you go for this type of financing. It is not uncommon for buyers to go for bridge financing, without being sure whether they can secure a mortgage. Glitches can occur and you may realise that you can’t secure a mortgage when it’s too late. It is also important to plan the development work and renovations. You need time if you are relying on some renovations to increase the value of your current property before selling it. Note the fees and the terms offered by your bridging loan lender. Keep in mind that you will have to pay legal fees, about £ 500 administration fee. A valuation fee is important particularly for buy-to-let and may range from over £ 250 to almost £ 1000. Some lenders may charge you an exit fee as well as other charges. Exit Strategy An alternative exit strategy is to remortgage your current house. You may go for a buy-to-let deal with your lender using the mortgage and use the rent for mortgage repayments. In some situations, such as when taking a mortgage with a Visa, such a deal may work better for you. Author is associated with a Loan providing company in London. They are able to arrange short term property loan to fulfill your urgent need; Here, He keen to provide detailed information on bridging loan along with mortgage with a Visa to choose best mortgage provider that suits your need.
Related Articles -
bridging loan, mortgage with a Visa,
| 
