The open bridging loans allow you to take out a loan even if the sale of an existing property is not in the plan. It is a type of short-term loan that you can use if the sale of your house or commercial building is delayed and you need money to complete the process. This is a good option if you are looking for something that will offer you money within a short period of time. The payback is short and in most cases, it is between 6 and 9 months. It is very important to take note of this time period because you will be required to pay back the money in full once the term expires.
With open bridging loans, the amount that you borrow will be secured by your property. This means that in case of a default on the payments, your property may be repossessed. Even if there is no sale pending, you are required to sell the property within the term of the loan. Most lenders will require you to provide an appraisal on the property. They also require information about the house value and how much similar properties are going for in the area.
Open bridging loans usually take a long time to complete compared to other kinds of loans. It can take about a week or more before the loan is approved but this will depend on the details that the lenders require from you. If you want to use this option, it is important to ensure all your documents are in order before you approach a lender. Closed bridging loans are used when you have just bought a new home and sold off your old one but the proceeds have not been sent in time. The loans help you to get the home and repay the amount as soon as you get the proceeds from selling the old house. This is a good option if you do not have credit because the new property will be used as collateral. It is a form of mortgage that is secured on the house.
Unlike the open bridging loans, the closed ones can be taken for various reasons including when you need money for a business, wedding or holiday. For the closed bridging loans, you are expected to pay back the money in about six months. You will be required to set a specific period of time within which you will pay back the money. It is important to make sure the term is reasonable. Unlike the open ones, you will face penalties for late payments instead of losing your property. It takes a short time to complete the closed bridging loans therefore you can get funds quickly.