If you have found the perfect new home for you and your family and the offer has been accepted but things are on hold because you are having problems selling your current property, then a bridging loan could be the answer to your problem. The bridging loan is taken to do just as its name suggest, bridge the gap.
While this might sound like the answer to your prayers and can indeed save you from losing your new dream home, they should only be considered as a last resort as they are generally the most expensive way of taking a loan. However when taken in the short term they can be the only solution to your problem.
There are two main types of bridging loan; these are termed the open bridge and the closed bridge. The closed is available to those who have already made an exchange on the property they already have, this is because very few offers fall through after the exchange has been started.
The open bridge loan is given to those who have found their ideal property but have yet to put the home they have currently up on the market. A lot of backing will be needed for this type of loan and you will have to prove that you have a lot of equity in your property before you are given the go ahead.
Those offering a bridging loan can expect the lender to want to see the mortgage terms for the new property along with the details for the property and of course you will have to show that you doing whatever you can to make sure that you sell your existing property.
The lender of the bridge loan will also want to make sure that you can make the repayments on the loan and you will be asked to show how you intend to do this and also how you would cope if the worst come to the worst and the deal fell through some months later down the road.
The majority of lenders who offer a bridging loan of this type will give you a limit of 12 months on the bridging loan. However most will allow you to negotiate after this period of time providing of course that the interest has been paid on the loan and no changes have occurred in the circumstances.
The best way to get information regarding bridging loans is to look online, here you can not only find information regarding the different types and what is available but you can also make comparisons and find the cheapest deal for your circumstances.