How Do Bridging Loans Work For Property in The UK

By on 27 September 2023   /   Blog  
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How Do Bridging Loans Work For Property in The UK

How Do Bridging Loans Work For Property in The UK How do bridging loans work for property in the UK? When it comes to purchasing a new property or expanding an existing business, sometimes you need quick access to funds that traditional loans can’t provide. This is where bridging loans come into play. Bridging loans are short-term loans that “bridge” the financial gap between the purchase of a new property and the sale of an existing property or other long-term financing options. These loans are typically secured against the property or assets being purchased. They are designed to be repaid quickly, usually within 6 to 12 months, and often come with higher interest rates compared to traditional loans. Bridging loans can be a useful tool for those who need immediate funds, but it’s important to carefully consider the terms and costs associated with these loans before committing to one. Explaining the Concept of Bridge Finance Bridge finance is a financial solution that bridges the gap between the sale of an existing property and the purchase of a new one. It is commonly used when individuals or businesses find themselves in a situation where they need immediate funds to secure a new property before receiving the full payment from the sale of their current property. The concept behind bridge finance is relatively simple. When a person or business applies for a bridge loan, they are essentially borrowing money against the value of their current property while waiting for it to be sold. This loan can then be used to buy a new property, with the expectation that the proceeds from the sale of the old property will be available to repay the loan in full. Bridge finance is a convenient option for those who do not have the necessary funds readily

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Bridging Finance And The UK Property Market Continues To Grow Year On Year In With Record Loans

By on 25 September 2023   /   Blog  
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Bridging Finance And The UK Property Market Continues To Grow Year On Year In With Record Loans

Bridging Finance And The UK Property Market Continues To Grow Year On Year In With Record Loans Bridge financing plays a vital role in the UK property market, providing a solution for buyers who require immediate funds to secure a property before their existing property is sold. It offers a temporary financial bridge, enabling individuals or businesses to complete their property transactions quickly and efficiently. An in-depth analysis of bridge financing reveals the intricacies involved in this type of funding, shedding light on the various factors, such as interest rates, loan terms, and repayment options, that borrowers need to consider before pursuing this avenue. With its flexibility and quick turnaround times, bridge financing has become an attractive option for those looking to seize property investment opportunities in the dynamic UK market. Exploring the intricacies of bridge financing in the UK property market reveals the critical role it plays in facilitating seamless property transactions. This specialized form of financing allows individuals and businesses to bridge the financial gap between the purchase of a new property and the sale of their existing one. By utilizing short-term loans, borrowers can access the funds needed to secure their desired property, providing them with a competitive advantage in a real estate market that moves swiftly. An in-depth analysis of bridge financing delves into the complexities of this funding option, unveiling the intricacies associated with interest rates, loan terms, and repayment structures. This comprehensive exploration helps borrowers make informed decisions, ensuring they fully understand the implications of bridge financing before committing to this financial strategy. Understanding the Nuances of Bridge Loans: Unraveling the complexities of bridge loans and their role in property transactions Understanding the nuances of bridge loans is crucial for anyone involved in property transactions. These loans serve as a temporary financing solution that

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Bridging Loans For The UK

By on 11 September 2021   /   Blog  
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What are bridging loans? A bridging loan (or ‘bridge loan’) can be useful if you need to borrow money for a short period. It can help to ‘bridge the gap’ if you want to buy a new home before selling your old one. Or if you need to release cash for business purposes secured against u residential or commercial property. How does a bridging loan work? There are two types of bridging loan: ‘closed’ and ‘open’. Closed bridging loans With a closed loan, there is a fixed repayment date – you will normally be given this kind of loan if you have exchanged contracts but are waiting for your property sale to complete. Open bridging loans With an open loan, there is no fixed repayment date, but you will normally be expected to pay it off within one year. Whichever kind of loan you take out, the lender will want to see evidence of a clear repayment strategy, such as using equity from a property sale or taking out a mortgage. They will also want to see evidence of the new property you are purchasing and the price you plan to pay for it, as well as proof of what you are doing to sell your current property if relevant. You should also have a back-up plan in place in case your repayment strategy fails. First and second-charge bridging loans? When you take out a bridging loan, a ‘charge’ will be placed on your property. This is a legal agreement that prioritizes which lenders will be repaid first should you fail to repay your loans. Both a first and second charge bridging loan take your property as security in case you default on repayments. Typically, if you still have a mortgage on your property, the bridging loan will be a

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German Bridging Loans And The Economy

By on 16 September 2020   /   Blog  
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It now seems, that despite pressure from the U.S. and the IMF, Germany’s decision to hoard cash reserves and maintain low debt, to enable them to deal with a “worst-case scenario” has proven almost prophetic. This situation has now materialised, and the government has been well placed to aid Germany’s recovery with a substantial financial rescue package. The German government has been typically efficient and resilient, in its management of the virus and its financial support given to its workforce. They have confounded many countries with their low death rates and stable unemployment figures. The property development market has continued to function and looking to use German Bridging Loans, albeit in a reduced capacity with external, or “dangerous” work being partially suspended during the lockdown to ensure that valuable ICU beds are kept for Covid19 patients. The lighter refurbishment end of the market, where the fund focuses its lending, has continued work, but within the strict safety guidelines issued by the government. At time of writing, we are already starting to see some European countries entering the next phase with Austria, Denmark and Czechia already easing restrictions, with a slow and structured return to work planned over the next few months. The German National Academy of Sciences Leopoldina recommended this week that the country could begin reducing the restrictions imposed by the government. Chancellor Angela Merkel announced that a gradual return to work would commence on the 20th April 2020. In terms of recovery, economists are split on this, although if we refer back to 2003/04 and 2008, we can see that consumer confidence is still much higher now despite this pandemic, and coupled with the strong unemployment figures, these are 2 of the key drivers in property growth. Liquidity Management Although there is definitely “light at the end of

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How Much Can I Borrow When Applying For A Bridging Loan?

By on 2 February 2020   /   Blog  
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How Much Can I Borrow When Applying For A Bridging Loan?

Bridging Lending – How Much Can I Borrow? Short-term finance such as bridging loans can be a very helpful form of short term quick finance for the right borrowers depending on your circumstances. They can solve time-sensitive property purchases such as properties bought at auction, unmortgageable properties or gaps in finance when up-sizing or downsizing. The amount you can borrow is dictated by your current situation and relies on multiple different factors. The main factors which will affect how much you can borrow are: 1. Your bridging lender! This is the key area where advisors like us make can make a difference. Our advisers have access to banks, private  lenders, non- bank lenders and specialist lenders not available to inquires by members of the public. The general public will not know about them, and because lenders are quite small, they don’t have customer service departments so aren’t set up to deal with direct approaches but rather specialist brokers like Platinum Global Bridging Finance. There are a lot of lenders out there offering bridging loans. There isn’t a universal financing appraisal or application system for getting offers on a bridging loan application – you have to approach each lender individually, give them the information their application process requires, and then wait to see if it suits their criteria. That will take time as an individual customer, a fair bit of time. And while you’re waiting for their answer you’re wasting time that can be spent on your day to day business activity. A good broker has all the criteria for all the different types of lenders across the market right there in front of them. They know who will consider your application and will take it right to them. The wrong lender won’t consider your application so favourably – they’ll offer

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