They are becoming something of a less frequent feature of the main mortgage lenders, being seen as a very high risk by many but the bridging loan is a useful feature if you want to borrow a large sum of money when you are in between purchases. The reason that the main lenders get nervous of this is that you might be left with a sizable loan if the sale falls through. It also almost replaces the deposit. As most large lenders will say, they are a responsible lender and can’t sanction it. However there are some that will and you’ll need some good legal backing to make sure all is ok with the transaction and deal. This is where Ascot solicitors are very useful.
The most common occurrence in modern times for using a bridging loan is when you buy a home at an auction. Sadly, these purchases are becoming more and more commonplace as the rate of repossession starts to rise. A fact not helped with the COVID virus that has put pressure on so many households’ finances recently.
There are generally two types, the closed and the open. The Closed type has a fixed repayment date that has to be adhered to. The open does not have a definitive date but there likely repayments plans usually see this completed within a year or just over that time.« Back