What Are The Advantages of International Bridging Finance for European Property

International bridging finance is a type of short-term loan that is typically used by companies or individuals to bridge the gap between the purchase of a property or asset and the receipt of long-term financing. The loan is typically secured against the property or asset and is used to provide the borrower with the necessary funds to complete the purchase.

There are several advantages of international bridging finance, including:

Speed In Completing International Property Transactions:

International bridging finance can be arranged and disbursed quickly, which is particularly beneficial for property purchases where time is of the essence. This is because the loan process is typically less bureaucratic and more streamlined than traditional mortgage applications.

Flexibility In Bridging Criteria:

International bridging finance can be tailored to meet the specific needs of the borrower, which can include bespoke loan terms, interest rates, and repayment schedules. This allows borrowers to structure the loan in a way that best suits their individual needs.

No Minimum Income Requirement:

Many traditional mortgage lenders have strict income and credit requirements that must be met before a loan can be approved. International bridging finance does not have these requirements, which means that borrowers who may not qualify for traditional financing can still obtain the funds they need.

Ability To Bridge The Gap Between Purchase and Long-Term Financing:

International bridging finance can be used to bridge the gap between the purchase of a property and the receipt of long-term financing. This can be particularly useful for borrowers who are looking to purchase a property that is in need of repair or renovation, as the funds from the loan can be used to make these improvements.

No penalty for early repayment:

Many traditional loans come with penalty charges for early repayment. International bridging finance typically does not have these penalty charges, which means that borrowers can repay the loan early without incurring additional costs.

Access to international markets:

International bridging finance can provide borrowers with access to international markets, which can be beneficial for companies or individuals looking to expand their operations or invest in foreign properties.

Property Asset-based lending:

International bridging finance is asset-based lending, which means that the loan is secured against the property or asset. This can provide borrowers with added security and peace of mind, as they know that the loan is backed by a tangible asset.

Cross-border transactions:

International bridging finance can facilitate cross-border transactions, which can be beneficial for companies or individuals looking to expand their operations or invest in foreign properties.

Higher Loan To Value:

International bridging finance typically offers high loan-to-value (LTV) ratios, which means that borrowers can borrow a large percentage of the value of the property or asset. This can be particularly beneficial for borrowers who are looking to purchase a property that is in need of repair or renovation, as the funds from the loan can be used to make these improvements.

Lenient Credit Underwriting:

International bridging finance providers typically focus on the creditworthiness of the underlying assets rather than the creditworthiness of the borrower. This can provide borrowers with an alternative financing option if they do not meet traditional credit requirements.

In conclusion, International bridging finance can provide borrowers with a fast, flexible, and accessible funding option that can be tailored to meet their individual needs. This can be particularly beneficial for companies or individuals looking to purchase properties or assets and bridge the gap between the purchase and receipt of long-term financing. The loan is typically secured against the property or asset, and the lack of minimum income requirements, early repayment penalties, and cross-border transactions can provide borrowers with added security and peace of mind.

Property bridging finance, also known as bridge loans or bridging loans, is a type of short-term financing that helps individuals or businesses bridge the gap between the purchase of a new property and the sale of an existing one. It provides immediate funds to facilitate the purchase of a new property before the sale proceeds from the old property are realized.

Here’s how property bridging finance typically works:

  1. Timing Gap: When you want to purchase a new property but haven’t yet sold your existing property, there’s a timing gap where you need funds to complete the purchase.
  2. Bridging Loan Application: You can approach a bank, lender, or specialized bridging finance provider to apply for a bridging loan. The application process may require documentation, including proof of income, details about the properties involved, and an exit strategy.
  3. Loan Assessment: The lender will assess your financial situation, creditworthiness, and the properties involved to determine the loan amount, interest rates, and terms.
  4. Loan Terms: Bridging loans are typically short-term loans with a repayment period ranging from a few weeks to a few months, although it can be extended in certain cases. The interest rates are generally higher than those of traditional mortgage loans due to the short-term nature and perceived higher risk.
  5. Loan Approval and Disbursement: If your loan application is approved, you’ll receive the funds necessary to complete the purchase of the new property. This enables you to proceed with the transaction without having to wait for the sale of your existing property.
  6. Sale of Existing Property: Once your existing property is sold, you can use the proceeds to repay the bridging loan. The loan is usually repaid in a lump sum, including the principal amount borrowed and any accrued interest.

It’s important to note that property bridging finance is meant to be a temporary solution and should be used judiciously. While it can provide flexibility and enable you to secure a new property quickly, it’s essential to carefully consider the associated costs, such as higher interest rates and fees, to determine if it aligns with your financial situation and goals. Consulting with a financial advisor or mortgage specialist can help you make an informed decision regarding property bridging finance.

Platinum Global Bridging Finance is a distinguished high-net-worth finance broker. We specialize in providing tailored financial solutions, including Property Bridging Finance, Development Finance, Lombard Loans, Single Stock Loans, Margin Stock Loan and Commercial Property Finance tailored to meet the diverse needs of our clientele seeking robust financial lending solutions.

By on January 20, 2023   /   Blog  
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