| |
| |
|
Loans Information |
|
|
Risk It With A Bridging Loan?
How many times have you been casually going about your business, seen a great property and thought, "that would be a really nice place to live"? Then you snap out of it, knowing you can't lay your hands on the money fast enough. Well what if you really wanted this property? You discussed it with the agent, your emotions got the better of you and you made an offer. This has to be a fast sale or the vendor will sell it to someone else, what will you do? How will you find the cash at such short notice? Unless you happen to have thousands of pounds lying around in some bank account you forgot about, you're going to have to borrow some money and fast! Did you expect the financial industry NOT to have a product for people just like you? Of course not. They've thought of everything. The answer is a bridging loan! A bridging loan provides a temporary window. As is suggested by the name, it bridges the gap between the amount of cash you need now and the amount you currently have. What you earn normally has no bearing on the matter. How much your current property makes on open market again does not come into it. Your bridging loan takes care of your what you need right now. If you apply for a bridging loan you can buy the property immediately. You will pay it back when you sell your current property. So, you see, you can have the best of both worlds. Just make sure you read the small print. Make sure you're not being charged extortionate amounts of interest. I always make a point of reading the small print, no matter how long it takes. Usually, a bridging loan will be a short-term loan with a repayment cycle of one week to six months. There should always be a clause allowing the customer to repay the full amount as soon as their current property is sold. More often than not, a bridging loan uses the customers current property as security. As the customer, you have options. You will generally have the option of securing the loan on both properties or either one of them. This gives you a little flexibility. These guys usually move fast. The brokers' valuer will assess the property and come up with a figure on which your bridging loan will be based. This figure will depend on many factors. At the top of the list, you'll find the usual suspects: location, number of bedrooms, size and the general condition of the place, to name but a few. As soon as the valuation is complete, the lender is in a position to advance the cash to the customer. If you choose a good broker this will happen fast. As a rough rule of thumb, expect to be able to borrow up to 65% of the value of the property. Lenders offer as much as Ł25000 to some million pounds on a bridging loan. Where's the best place to get a bridging loan? Ask your financial advisor and look around, especially on the internet. More and more lenders are coming online these days and there are always some really great deals to be had as lenders try to "out-offer" each other. Get quotes from as many different lenders as you can. Draw up a quick rate comparison sheet to help you decide. You will find that there are many different fee levels for this kind of loan. Sometimes it may be better to pay a little more if the terms are more favourable. Again, always read the small print. One of the main deciding factors for you will be the speed at which the cash will be forthcoming.Always make this the most important factor in your decision. No point going through all this to be pipped at the post because you were waiting for the money. The whole reason to get a bridging loan is to get instant cash. Choose a lender who specifically states how fast they deliver after signing. You will find many lenders are less than acceptable on this point. So, a bridging loan can help you out in a tight squeeze. However, there are always two sides to the coin. Bridging loans are perceived as "higher risk" by most lenders. Interest rates are generally higher because of this and you may find that the one-off charges are also higher than with a conventional loan. Usually because this is the customers' only option and the term is short, the rates will be accepted. The best way to approach a bridging loan is to keep the term short thereby minimising costs. A further risk when using a bridging loan is counting on your existing property being sold quickly. Should the market drag for you, you will end up paying lots of interest on your bridging loan. This will be your situation until your home is sold. To conclude, a bridging loan may seem like a great way out and used correctly, it often is. However it is not without it's risks. The risks are very real and deciding to take out a bridging loan should be a measured decision. For these reasons, it's highly recommended that you talk to a good independent financial advisor. Fabio Marcell is a seasoned contributor to many online andoffline journals specialising in the financial sector. Hehas many years experience in the loans industry and iscurrently sponsoring the following website: http://www.a1-low-interest-loans.info(for web reprints please ensure this URL is hyperlinked)(c) 2005 Fabio Marcell - All Rights Reserved
MORE RESOURCES:
Google News |
|
|
|
RELATED ARTICLES
Quick Cash Advance Payday Loan - Get it Free or Cheap If you are looking at getting a payday loan or a cash advance loan, you probably already know that one of the main drawbacks to getting one of these types of loans is that the fees can be so high.The positive side of getting a payday loan or a cash advance loan is that they are so convenient. Bridge Loans: Everything You Wanted To Know As the name implies, bridge loans fulfill a vital need for active developers by giving life to a new project in the months before lenders feel confident enough to make available a construction loan, or a repositioning loan in the case of an existing project. But real estate bridge loans have other uses, both tactical and strategic, that make them indispensable in today's New York marketplace. When the Bank Says NO! Factoring has been practiced for centuries. The Romans sold promissory notes at a discount as did the Phoenicians. Guide to Secured Loans Here is a useful guide to secured loans. A secured loan is a loan that a lender provides on the understanding that a property is secured against the loan. What is Credit Insurance? Are you wondering what is credit insurance? Very simply, credit insurance is an insurance policy that protects a loan on the chance that you are unable to make the repayments. The next time you have occasion to apply for a loan or mortgage, you will be asked if you want to buy credit insurance, or it might already be included in your loan proposal. Secrets & Benefits of Secured Loans Borrowing money has become more and more popular in the UK over recent years, and this is partly due to the fact that it has become far easier to borrow money. The rising popularity of consumer finance has also been aided by the wide variety of deals and the low interest rates available these days. Car Loans After Bankruptcy - How Poor Credit or a Recent Bankruptcy Can Affect Your Loan Approval If you have poor credit or a recent bankruptcy, you can still get approved for an auto loan through sub prime lenders. Sub prime lenders specialize in financing auto loans to people with adverse credit. Wedding Loans Because Wedding May Be Made In Heaven But They Are Certainly Not Made For Free Wedding loans because wedding may be made in heaven but they are certainly not made for free.The one day that encompasses the glamour, the thrill, the dreams, the nervousness, the apprehension, the happiness and the most profound feelings of your life is the wedding day. Secured Business Loans - Equipping Your Business Blueprint With Concrete Groundwork Somebody once said, 'Business is not financial science; it's about trading, buying and selling. It's about creating a product or service so good that people will pay for it. A Guide to Debt Consolidation Loans Should you find yourself overcome by debt, you might want to consider debt consolidation loans. These loans are designed with the person in debt beyond their means in mind, allowing for repayment of the outstanding debts while combining multiple payments into a single affordable monthly payment. A Guide to Finding Home Owner Loans If you're in the process of trying to find home owner loans with a good interest rate and acceptable terms, you'll likely find that there are a variety of options available to you. As long as you have sufficient equity in your home to secure the home owner loans that you apply for, you're likely to be able to find a loan to meet your needs regardless of your credit rating. Secured Holiday Loans- Your Chance To Unwind Your Senses "All work and no play makes jack a dull boy".The phrase sounds more as a cliché, having been used innumerable times right from the time it was coined, but has a vital message enclosed within itself. Are You Ready for Your Students Student Loans? Your son or daughter is a high school senior and your worried about the coming year, and more importantly, the coming student loans? College has become so important in your children's future that parents have begun to plan for it at their child's birth. But, not all of us, as new parents thought that far ahead or could afford too. How To Reduce Your Payments Are you paying out too much every month for your credit cards, store cards and loans?If each month you have far too many payments to meet and you cannot see a solution to your problem then why not replace them all with one, lower, convenient repayment through a debt consolidation loan?Debt consolidation loans can give you a fresh start, allowing you to consolidate all of your loans into one - giving you one easy to manage payment, and in most cases, at a lower rate of interest.If your objective is to reduce interest rates and lower your monthly payments, avoid bankruptcy, consolidate your bills and have one monthly payment, or simply get out of debt the fastest way possible, then a debt consolidation loan could provide the answer. Holiday Personal Loans - When the Traveller Within You Wants to Break Free If you are a traveller by heart then perhaps every holiday you wait for a chance to fly away somewhere around the world. The world is full of so many cultures and colours. Beware of some Get Cash Now Vendors Some weeks it feels like you're living hand to mouth. If you could just get cash now, all your problems would disappear. Government Loans for Beginners Government loans are those that the government of a country provides to the citizens of that country in order to fulfill there needs and for their uplfitment or betterment. This helps in reducing the wide gap between the rich and the poor and streamlines the economy of the country. High Risk Personal Loans - Revive Frustrated Loan Hunting Attempts with High Risk Loans Bad credit seems like an unfinished business, you can't shake it off, and you can't move on without putting it away. Unfinished business is meant to be finished. To Be Mr. and Mrs. Sometimes You Need Wedding Loans The conception of wedding has changed over the years. Its conception, its configuration, the way it is planned - all have changed through the past times. A Beginners Guide to Online Loans If you're just beginning to look at online loans, you might feel that you're getting in over your head.Online loans have been growing in popularity in recent years, due in no small part to the ease and convenience of being able to apply for online loans from the privacy and convenience of your home at any time of the day or night.
|
| home | site map |
| TIGER MEDIA© 2006 |
