Deep Listener Blog

Temptation of bridging loans

October 31st, 2009

One tempting solution is to use a bridging loans, where a bank lends you money to buy the new house before the old one is sold. This is a fairly obscure type of finance, but it seems to be getting a bit of publicity and is likely to get more as the property market remains stagnant and sellers get ever-more desperate.

The bridging loan might be made based on the value of the company premises, permitting funds to be raised via alternative sources for example a management buy in. A property may be offered at a reduction if the client can complete quickly with the discount off setting the costs of the near term bridging loan used to complete. In auction property purchases where the purchaser has only 14-28 days to finish, long-term lending like a buy to let mortgage may not be feasible.

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Entry Filed under: Business