Haven't sold your old house? Let bridging loans bridge the gap.
Bridging loans are designed to give you help when you're moving house, especially if you've bought a new house but haven't yet sold your previous home. They're like short-term mortgages and they can be a boon in today's housing market where good houses are snapped up very quickly.
Moving house can be a nightmare, especially if you've found the perfect property but haven't sold your own place. Bridging loans are designed to help in these situations, and are like short-term mortgages: the lender gives you enough cash to purchase your new home while you get on with selling your old one.
Bridging loans are widely available from mainstream lenders and if you can get a mortgage, you can probably get a bridging loan too. However, it's important to note that bridging loans tend to have fairly high interest rates – much higher than standard mortgages – so they're strictly a short-term solution. If you're not confident that you'll be able to sell your own home quickly, bridging loans could prove to be very expensive.
Like mortgages, bridging loans are secured on property – either your new home, existing home or both – and tend to require a property valuation. The lender will then give you a proportion of the value, usually up to two-thirds, and interest is calculated monthly. Shopping around can help you find the best interest rate, but speed is often more important and as a result, you'll probably go for the firm who can sort out the money the fastest.
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