| Bridging loan is generally taken to get out of the | | | | gap that may at times arise between selling and |
| temporary cash deficit. This cash shortfall commonly | | | | buying the property. In comparison with a |
| arises when one is to start a business or buying a | | | | conventional mortgage bridging loans are generally |
| new home or office premises. Apart from them, | | | | taken out at a greater rate. |
| when there is shortfalls of cash between purchasing | | | | Basically, there are two types of bridging loan. The |
| one property and selling the other property, this kind | | | | first one is open bridging loan and the second one is |
| of loan is used to cover this shortfalls of cash. | | | | closed bridging loan. The former is used when the |
| By keeping the property as a mortgage, a bridging | | | | terms on the house to be sold has not yet finalized, |
| loan is secured. Basically, it is not a long term | | | | but one is well ahead with the deals as to buying a |
| mortgage, instead, it is short. It is generally secured | | | | new home. On the other hand, the latter is taken |
| by getting a mortgage on the new assets, and | | | | when everything is finalized on the home to be |
| getting another mortgage on the assets being sold. | | | | bought and sold, but there is some sort of delaying in |
| The bridging loan helps one to borrow some amount | | | | sifting. |
| of money for a shorter period of time. This loan can | | | | All kinds of clients can take bridging loans. They may |
| be paid off when the house is sold. Since, it is taken | | | | be from Limited Corporation to individuals; from |
| for shorter period of time, so one has to pay higher | | | | people with outstanding credit record to the people |
| fees and more interest in comparison with the loan | | | | found it hard to get loans and mortgages, together |
| taken for longer period of time. | | | | with self-employed and people with a very poor |
| Sometimes, bridging loan is also used to buy | | | | credit record. |
| properties which are at auction and for residential | | | | As far as the property that can be kept as a |
| renovations and fund short-term commercial. Besides, | | | | security for the bridging loan is concerned, all kinds of |
| sometimes it happens that mortgage is deferred, in | | | | property such as residential property, commercial, |
| this situation, bridging loan helps to protect an assets | | | | semi-commercial properties or land can be regarded |
| purchase. | | | | as collateral for a bridging loan. |
| Undoubtedly, bridging loan is a great way to zero the | | | | |