|
A bridging loan is a temporary loan that provides money to tide you over between paying for a purchase and you receiving the funds from the sale of another asset. In this context, bridging loans are commonly used in conjunction with the purchase and sale of houses.
For example, if you have to exchange contracts to buy a new house and need a deposit before you have actually sold your own home, you may need a bridging loan for the deposit. Alternatively, you may have to move to a new area because you've changed your job and you need to buy a new house before you have sold your existing house. In these sorts of circumstance, your bank should be keen to assist you.
But a bridging loan does not have to be associated with property. It could be that you want to buy an investment before you receive the funds from another investment you are selling to fund the new purchase.
Either way, the lender providing the bridging loan will want to be certain of the value of the assets you are selling and may want a temporary charge or solicitors undertaking, to guarantee that the proceeds of the sale will be paid to the lender to repay the loan.
Loans articles
More Loans FAQ's
|
