When you’re arranging finance to buy a home or other property, you’re likely to be looking for a regulated bridging loan. This type of loan can be very beneficial, particularly if you’re in a hurry. Typically, the interest rate will be higher than that of a long-term mortgage, but you can make sure that your new property is protected from repossession.
A bridge loan can be used for many purposes, including buying a new home, avoiding a sale-contingent offer, and financing an interim expenditure. It’s important to remember that there are many different kinds of bridging loans, and you should consult with your financial adviser before applying for one. If you’re trying to find the best loan for you, you’ll need to take into account the amount of money you need, as well as your budget, your current financial status, and your future plans.
The Financial Conduct Authority (FCA) regulates financial services in the UK, including bridging finance. It was established to increase the integrity of the industry and promote competition. Although the FCA isn’t directly involved in deciding whether or not you can get a bridging loan, it does have a role in protecting you from misinformation.
To find out whether a bridging loan is right for you, you can first contact a broker. These brokers will be able to help you with your application and arrange for the loan you need. During the application process, you’ll be asked a few questions about yourself. Depending on the lender, you may have to hire a solicitor as well. Generally, the cost of the arrangement fee will be around 2% of the total capital you borrow.
Another consideration is the length of time you’re going to need to borrow the money. The length of time you’ll need to repay the loan will vary based on the purpose of the bridging loan. Some bridging loans last for just a few months, while others can last for a year or more. Depending on your situation, you might be able to borrow a large sum of cash. For this reason, you should also be careful about overextending.
You should also consider the cost of obtaining a bridging loan. Unlike traditional mortgages, the process is faster. In some cases, you can secure a loan within a day. While the process is not free, it can save you a lot of stress.
While you’re waiting to get a loan, you might be able to sell your existing home to another buyer. If you have trouble selling, however, you might be in for a hard time. Using a bridging loan to get your house sold will give you a buffer, while you wait to get your finances in order. Moreover, it can also be useful for acquiring the best possible price for your home.
Getting a bridging loan can be a lifesaver for many people. Especially if you’re dealing with an in-demand property. However, if you don’t get your money in a timely fashion, you might end up with a hefty bill, especially if you need to refurbish your property.