While we all dream of having our very own dream homes with white picket fence and bird houses to accentuate it, the majority of us get stuck with two-roomed apartments or small houses at the most. Almost always the reason behind this unfulfilled dream is the lack of funds. Even though dreaming is something we can afford; it is very rarely that we possess the financial ability to make those dreams come true. Even if we can arrange the money; the process seems to be painfully time-consuming resulting in the chosen property to acquire some other owner more often than not. Fortunately, things have taken a turn for the better in the last few decades and temporary economic crisis is no longer an impediment to making the dream homes a reality.
Residential bridging loans explained:
Admittedly, purchasing a new property is a challenging task given that the sum of money required to make such a purchase is quite big. However, if you already have a property that you are willing to sell, the momentary financial crisis can find a way to ease itself out. This is where bridging loans emerge as an important and effective solution. Most people base the purchase of a new property on the sale of their old one. Waiting for the completion of the entire selling process can get a bit long sometimes and therefore it jeopardizes the purchase of the new property. That is why, in the interim, the residential bridging loans can be availed. Significantly, the repayment options are quite lenient and are designed to help the applicant repay the loan in easy intervals. These loans are provided to the buyers in two distinct formats – open end and closed ends.
The types of loans:
Open end loans are those where the applicant has not yet sold the old property or even put it up for sale and therefore, needs to provide evidence to the lender that they would be able to repay the loan within the given time span even if the old property is not sold. In the closed end type, the sale of the old property has already passed the stage of contract and that contract can be used as collateral to apply for the loan.
As these loans are basically short-term back-up facilities, the interest rates are slightly higher than long-term loans. Interestingly, the credit status of the applicant is not of much importance as far as this loan is concerned. It is because of the fact that this loan has an inherent secure nature due to the provision of collateral.
Various types of interest rates are available from different lenders of residential bridging loans. Before applying for this loan an applicant must do a proper study of the current loan market to get a clear idea about the trends. It would be wise to compare the quotes of quite a few lenders in order to choose the best option that meets your requirements. One must also go through the terms and agreements before availing a loan in order to avoid unwelcome confusions later on. Visit here for proper information about residential bridging loans http://www.morphybridgingloans.co.uk.