More often than not, dilemma of transaction in which a borrower comes across with. The person may not have the amount of purchasing the other house he wishes to be. And in order to get the required finance, he pledges his existing house in bid of getting a good monetary support. For such situation, cheap bridging loan has been configured by the lending authority across the country.
For the security of cheap bridging loans, followings are acceptable as collateral:
• Buy to let properties
• Commercial or Semi-commercial properties
• Residential properties
• Retail shops
• Auction properties
• Development sites
Cheap bridging loan is expensive and usually considered to be an ultimate financial resort. But if a cheap bridging loan can tide you over in the short term then the extra expense may save you from losing money already spent in the purchase process, as well as reducing stress. For all this purpose, amount sanctioned by the lending authority under the cheap bridging loan is ?1, 00,000; further on the request of the borrowers, this amount can be increased up to ?4, 00,000.
There are two main types of cheap bridging loan i.e., the closed bridge and the open cheap bridging loan. A closed form of cheap bridging loan is only available to homebuyers who have already exchanged on the sale of their existing property. Very few sales fall through after exchange, so lenders are happy to offer closed-bridge financing. On the other hand, an open form of cheap bridging loan is taken out by buyers who have found their ideal property, but may not have put their existing home on the market. A bank will ask lots of questions and want supporting information. It will also insist on you having lots of equity in your existing property.
