A Bridging Loan

A bridging loan is a type of short-term financing that is used to bridge the gap between the purchase of a new property and the sale of an existing property. This type of loan is typically used by property developers or individuals who are buying a new property before their current property has sold. Bridging loans are designed to be a flexible solution that allows borrowers to access funds quickly to complete a property purchase.

Lenders will typically offer a loan amount based on the value of the borrower’s existing property, with interest rates and fees charged on a monthly basis. Bridging loans can be secured or unsecured, with secured loans requiring the borrower to use their existing property as collateral.

As bridging loans are short-term loans, they typically have higher interest rates than traditional mortgages. However, they offer a valuable option for individuals who need to access funds quickly to secure a property purchase. It is important for borrowers to work with a mortgage broker who has experience in securing bridging loans, as they can advise on the best lenders, rates, and terms for each individual’s unique circumstances.