Secured Bridging Loan UK

A secured bridging loan is a specific loan that lends support to the person who is in the process of a property purchase. The need for a secured bridging loan is generally created because of the fact that property purchase requires large amounts of money and if the purchaser of the property is unable to arrange the finance he requires within a stipulated amount of time, he might lose the opportunity to purchase the property of his dreams and another buyer could snatch it out from under his feet.

A secured bridging loan is granted to the borrower when he requires a large amount of money to purchase a home or property but has been unable to raise that funding in the stipulated amount of time allowed according to the offer to purchase. The secured bridging loan will then be used to pay for the property and will be repaid to the loan provider once the lender can arrange the cash. Bridging loans are useful when a buyer wants to purchase a piece of property of a derelict building and the normal financial institutions will not grant him a mortgage to do so.

Because a bridging loan is a secured loan the lender must be able to provide an asset as collateral for the loan, in the case of using a bridging loan to secure a piece of property that is being purchased with the finance from the bridging loan, that particular piece of property will be pledged as collateral. Bridging loans are specifically designed to be short-term loans and are only granted fro period of one – twelve months. The bridging loan is an interest bearing loan only and this means that the lender will only pay back the monthly interest on the loan with the capital amount being due in full at the end of the term of the loan.

Borrowers who have a bad or poor credit rating are also able to apply for a secured bridging loan, particularly if the loan is to be used for property cash gaps, but as is usual with most bad credit lenders and higher interest rate will be applied for the bad credit lender.

Summarily what a bridging loan can do is if you want to purchase a new home and you have not yet been able to sell your old home, the bridging loan will allow you to purchase the new home while you are still selling the old one, as soon as your old home is sold you repay the bridging loan.

If you are interested in finding more information on secured bridging loans please visit this link