Posted March 4, 2024

In our extensive mortgage toolkit, we are increasingly seeing Bridging Finance used by clients. Historically, Bridging Finance was considerably less competitive than other forms of finance, however with rates now as low as 0.55% per month it is no wonder that Bridging Finance has become so popular.

But what is Bridging Finance? Put simply, it’s a short-term loan to help you ‘bridge’ the time between buying something while waiting for your money to be released by the sale of something else.

Here’s a closer look at why Bridging Finance has gained such prominence:

Speedy Access to Funds
Perhaps the most notable advantage of Bridging Finance is its agility. Bridging loans can be secured in a fraction of the time. You can buy a new property before selling an existing one (or even multiple properties) avoiding you missing out on a property you want to purchase.

Repairing A Broken Property Chain
The loan can prevent a homeowner from missing out on purchasing their new home if a buyer in a property chain drops out and avoids having to wait until a new buyer is found.

Downsizing
People downsizing usually don’t require mortgages and Bridging Finance enables these clients to buy before selling their own property so they can move quickly and independently.

Flexibility in Repayment
Bridging loans typically offer more flexible repayment terms compared to conventional loans with interest payments rolled up until the end of the loan term, providing greater control over cash flow.

Support for Non-Standard Circumstances
Bridging Finance is accessible to individuals facing challenges in obtaining traditional loans due to unconventional circumstances, property types or credit history.

Auction Finance
For people buying property at auction, bridging finance can allow them to pay the required percentage needed as a deposit and then complete the transaction in the time provided for by the auction contract.

Un-mortgageable Properties
Bridging Finance can also be used for people renovating dilapidated properties, where traditional mortgages would not be approved, for example where the property has no bathroom or kitchen.

Bridging Finance has proven its worth by providing swift, flexible, and accessible financial solutions. Whether navigating property transactions, seizing investment opportunities, or addressing short-term capital needs, Bridging Finance can be an invaluable option to have available.

If you think Bridging Finance could be useful in your situation please contact Alistair Macarthur on 01270 620555 or email alistair@watts-ifa.com.