Understanding Bridging Loans Makes the Process of Buying New ...

It?s not uncommon to find people running out of the money required to purchase a new property. If these individuals already have a property that they intend to sell then they can take help of bridging loans to buy the new property. These loans help overcome the temporary cash deficit that can be a hindrance in buying a new property.

There are times when it is difficult to find a buyer for an existing property immediately. This places financial constraint on the person who is planning to buy a new property. The main idea behind the bridging loan is to place the existing property as collateral and use the loan amount to buy a new property. If the property owner is able to get the buyer for the existing property then the money received from the buyer goes in clearing the bridging loan.

The present economic downturn situation has resulted in credit crunch, and it is difficult to get loans for the new houses.

Even when it is available; the terms, conditions and eligibility criteria are very strict. This makes it difficult to get a mortgage just when it is needed urgently. It is here that the importance of bridging loans is realized. Generally, the terms of this loan requires the borrower to place their existing property as collateral. At the same time, depending on the lender, there may be other terms, conditions and requirements. The applicant has to fulfill this criteria before the bridging loan is approved.

Sometimes, property owners have difficulty in figuring out when a new buyer will be found for their existing property. In such a case, the loan taken under this condition is referred as a closed bridging loan.

It may have higher fees and monthly interest charges. However, generally property owners know the date when their existing property will be sold, and the date when the new property will be ready to buy. In such a case, the terms, conditions and fees are more favorable. This loan is an effective solution to overcome the temporary cash crunch experienced in buying new property.

Source: http://property.ezinemark.com/understanding-bridging-loans-makes-the-process-of-buying-new-property-easier-7d377ab96716.html

paul babeu kevin costner budweiser shootout animal house invincible jesse jackson whitney houston funeral video