A bridging loan is a short-term interest-only loan available to those that need immediate access to capital for a property purchase.
In short, it is a loan to ‘bridge’ the gap while other finance is secured by the borrower.
Bridging loans are secured, meaning the borrower uses other property or land as security to the lending institution.
Bridging loans are mainly used by clients that need quick, short-term capital to fund a property purchase.
They include those who:
• Need to complete quickly. This might include property developers, who often have the opportunity to secure a great deal if they can complete quickly.
• Buy through a property auction. Bridging finance are popular with those buying property at an auction. Here, completion has to take place within 28 days which means traditional financing is not usually an option.
• Are in a broken property chain. A bridging loan enables a seller of one property to secure their new property before the sale of their existing property goes through.
JB Mortgages are not authorised to give advice on bridging finance. If this is something that may be beneficial to yourself, we can make a referral to a reputable firm who specialise in this area.
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