![]() ![]() If you don’t pay the money back, you could lose the asset. The loan is secured against an asset, most often a property you own (or several properties). Typically, a bridging loan lets you borrow between £10,000 and £500 million. This is because the FCA does not offer protection for bridging loans that are used for investment property, buy-to-let, or commercial real estate. To get one of these products, at least of 40% of the property will need to be lived in by the homeowner or an immediate family member (either now or in the very near future).Ĭommercial or investment bridging loans are known as unregulated bridging loans. This covers homeowners, who need a short-term cash injection, typically because their funds have been delayed. That means they are usually more expensive than regular loans and mortgages and should therefore only be used as a last resort or for specific, short-term scenarios.īridging loans for personal residential properties are regulated by the Financial Conduct Authority. Another reason for a bridging loan might be to renovate a property before moving in.īridging loans can be arranged quickly, but typically have extremely high interest rates. They are also sometimes used when people are buying a house at auction, and need to have funds available immediately if their bid wins. Most often, this sort of finance is used to bridge a gap between buying a new home and selling your old one, for instance if someone wants to break their chain and be a cash buyer. A bridging loan is a short-term form of borrowing used in property transactions. ![]()
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