Before I start writing the article I would like to make your mind clear about the precise definition of bridging loans, what it is actually and how it will take you to prosperity.
“Bridging loans are a short-term loan used as a way to endow with funding for the purchase of a new property while the borrower expects the sale of an on hand property”.
Off-course it seems risky and it is said that unless all the stars are not in perfect alignment, it can turn a bad luck. But very frankly saying selling of property is not a big deal and if you have property than taking loan on its part is not a big deal. The only thing demanded by bridging loans is that you need to be tricky in co-ordination and purchase and sell of new property and if transaction occurs simultaneously than no words to describe your stars.
A Bridging Loans also known as commercial bridging finance makes these types of transaction easy and possible. It not only helps you with instant money but also helps you keeping away from getting stuck by financial crisis. By taking this loan borrower need not to pay for two mortgages and the best part of these loans is that you can take it for commercial purpose and also for personal purposes.
Features of these loans
These loans are short term in nature
The application process for borrowing these loans are more or less similar as of the other loans.
When you are planning to have bridging commercial loans it is preferred that you should opt for private lender than commercial banks. The reasons are many, bridging loans are short term loans so it is better to have someone who charges least interest, secondly lender can easily give you loans with minimal paper work. The need for commercial bridging loans start or can be guessed little early so it is suggested that you should go for pre approval of these loans.
Bridging Loans get paid back in the form of only interest. This means you get the entire amount from the lender, keep on paying the monthly interest until your backed property is not sold out. Once the transaction is complete, give away the handy principal amount back to the lender. So, in the case of repayment option in bridging loans principal payment is one time lump sum payment.
These loans are good for both the parties as in the case lenders also need not to worry about defaulter because the money seeker is obligatory to put up security or guarantee to secure the loan. This is normally in the form of an additional part of property.
But on the part of borrower, I want to make the point clear that the lender will still systematically evaluate your credit history. And I think it is genuine on its part also because any one will undergo the same procedure because of the level of risk he/she is taking. But not to worry poor credit is not an obstacle.