A bridging finance is a form of short term mortgage which will offer you an asset that is not owned by you as security. Often they are used to cover you until a later date when you can refinance to a longer term mortgage or sell your home. Bridging finance is also able to be provided against any property or asset and is used for many different reasons.
For example, a lot of new construction properties are sold on the market to tenants that are just starting to settle in. The banks and other lending companies prefer to get their money back out of these tenants than from the new home owner. This is where bridging finances come in as they allow you the opportunity to pay off your mortgage in advance, allowing the bank or lending company to collect the funds they are owed from your tenant. This also enables you to secure another mortgage that is more affordable on a larger scale. It is important that you choose the correct loan product so that you are able to get the best return on your investment.
Bridging finance is also commonly used by investors and institutions. This is mainly because it allows them to invest in properties with the risk of them not being repaid. Because the property is in fact not owned by the investor, they can borrow against it as if it were a secured loan. However, if they do not pay off the property on the agreed date, they will have no recourse against the property so it is very popular for lenders to offer these types of loans. These mortgages are commonly known as’second mortgages’ and are also able to be used to finance businesses or even private schools. If you want to learn more about bridging loans and how they can benefit you, then why not consider speaking to a professional online who can help you through the process?