Bridge Loan for Home Buying
Bridge loans are a type of short-term finance also known as bridging loans and bridging finance. They allow you to borrow significant sums of money, usually for up to 12 months, although longer loan terms are possible.
When to use a bridging loan for home buying
Bridge loans are intended as a temporary solution when other forms of borrowing, such as a mortgage are not available. They are often used for home buying and can be arranged in as little as a matter of days, making them ideal when speed is a priority.
Bridge loans for home buying are often used for:
- Property auction finance
- Property renovation projects
- Buying a new home before selling a current one
How much does a bridging loan cost?
The cost of bridging loans varies depending on a variety of factors, including how much you need to borrow, how long for, your loan to value ratio (LTV) and your credit rating. All of these will affect your interest rate and therefore have a direct impact on the overall cost of borrowing with a bridge loan.
When you take out a bridge loan for home buying, the main costs will usually be:
- An arrangement fee (when you take out the loan)
- An exit fee (when you repay the loan – although not all lenders charge these)
- Your monthly interest (you may have the option to roll this up and pay it as a lump sum when the loan term ends)
Find the best rates on a bridge loan for home buying
Bridging finance can be more expensive than some other types of borrowing, so it is important to find the best deal you possibly can to keep your costs down. Our free bridging loan calculator makes that much simpler, allowing you to quickly and easily find deals from across the market to match your borrowing needs.
If you need to find a bridge loan for home buying, please get in touch with our friendly expert team of loan brokers using the contact form on the right or by calling 0117 313 6058.