Bridging loans explained #101 | What is a bridging loan?

So first things first, the question
I want to answer is: What is a bridging loan? So the first thing I wanna do is
dispel some myths and kick off by making sure you’ve got a good understanding of
what a bridging loan is. The difference between a bridging loan and a regular
mortgage is essentially the term. A bridging loan is short term, usually 12
months, may be a little bit more, but it can be more or less. A regular mortgage
on the other hand might be for 35 years or maybe even 40 years! A big difference
right? A bridging loan is normally used when it’s not possible to finance a
property on a standard mortgage. This might be because it needs
refurbishment, planning issues need to be sorted or there might be some other
problem with the property! Essentially a bridging loan is a stopgap that enables
you to move forward before planning your exit strategy, which is usually
remortgaging or selling. A bridging loan can be used for great effect for buying
properties quickly such as at an auction when getting a regular mortgage will
take just too long. Or if you want to buy a new home before selling your own
property, a bridging loan can minimize the risk of losing that next purchase.
Bridging loans are often used for property developments on a commercial
basis, but can be used for self builds, renovations and conversions. Like I said
they’re designed to be used as a bridge for where you are now to a longer-term
loan. Do bridging loans always have to be related to property?
Yes and no! You could get a bridging loan now for any reason but it has to be secured
against an asset, usually property. Thanks so much for watching, if you liked the
video don’t forget to give us a big thumbs up, share, like, subscribe and do
all those amazing things 🙂

Paul Whisler

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