Normally, Bridging Loans are taken out when you need a large sum amount but have ability to pay back it in short term
. This financial help is usually taken to purchase a material goods or a building plot. These loans are available in the finance very easily as number to new companies are offering this deal with wide range of facilities. These credits provide you instant cash approval without crossing the hurdles of tough loan paperwork.
As far as amount of the loan is considered, you can easily fetch an amount of 100000 to 400000 with repayment term of 1 month to 1 year. This mortgage is supposed to be one of the reliable financial options till the time you can get adequate funds by selling your older property.
There are several types of bridging loans however the most common conditions are where you wish to buy a property but have not finished the sale of your existing property or when you wish to buy a property at auction. Depending on the lending agency, it can be obtained by the self employed or people with bad credit history and score.
These finances are secured on either property or land and the typical highest amount you can borrow is 85% of the market value of the possessions. You can place anything as collateral like your home, car, any bond, land etc. It is however possible in some conditions that you can borrow 100% of the market value if you use added properties you own as collateral.
The interest rate on this borrowing depends on several key factors which include the possible risk associated with the loan, the current interest rates and a quality added by the lending agency. As these funding are short-termed, so repayment term is usually not longer than two years.
In case that your property is not sold then this loan will itself turn into a conventional loan without a disbursement penalty. Check the terms offered by your lender because some hidden terms and conditions might problematic for you.