Financing Property in France Before You Sell in the UK Using a Bridging Loan

Whilst working out here in France, I’ve had a few UK-based clients recently asking me about how they can finance property in Provence whilst still waiting for their home sale to go through in the UK.  Whilst it’s not particularly easy, there are ways in which you can do it – typically using something called a bridging loan.  Here’s another overview from me on what this entails and how a bridging loan can be used.  If you would like to discuss this in more detail then please contact me to make an appointment or to have a telephone consultation.

The Bridging Experts for LoansPlease note as terms of a disclaimer; I work with a company in the UK called Bridging Experts, and so any links in this article do go straight to them.  If you decide to work with me, then I will always use them for any quotations and calculations for a bridging loan as they are my preferred supplier.

Bridging loans refer to financial assistance given for the purpose of acquiring property over a short period while seeking permanent financing. That is, they help fill the temporary gap when buying or renovating property. These loans are secured hence they usually require significant collateral. The repayment period ranges between 6 and 12 months. However, this is dependent on the borrower’s ability to repay.

Types of Bridging Loans

There are two types of bridging loans namely the closed and open finance. For starters, closed finance is where the lending institutions have the discretion of determining when the loan should be repaid. This option also has the backing of legal contracts and mainly targets those people that are considering purchasing new property. The good thing about this loan is that it is less risky. On the other hand, the open finance loan a repayment date is not spelt out for you. Moreover, you can use the loan for other purposes that are not purchase of property – you can see a full list of different bridging loans here on the Bridging Experts website.

When to Go for Bridging Loans

Bridging loans come in handy when faced with different situations that need urgent financing. Some of these include when you are unable to sell existing property so that you can purchase new property. You can also opt for these loans when faced with an impending deadline yet you do not want to go for a long term loan. Sometimes a loan commitment at your bank may backfire yet there are other buyers waiting to purchase the property in the event that you are unable to pay hence the need to get a bridging loan. Although rare, there are instances where financial institutions are simply unwilling to fund your project or you would like to purchase a run-down property and redevelop it – having said that I have heard reports recently that Sainsburys Bank are starting now to accept these types of deal.

Bridging loans are also ideal for those people who have a bad credit score yet they require temporary financing in order to not only build their credit even as they work out on obtaining permanent loans. Ultimately, bridging loans are a sure way of solving your cash flow issues albeit on short term basis.  It is possible to see how much you can borrow as many companies and websites have a bridging loan calculator on their website like the Bridging Experts do.

Things to Consider

While it is easy to obtain bridging loans, it is equally important to take a number of factors into consideration before applying for these loans. Some of these factors include the amount of money that you need, your needs, time frame as well as the area where you intend to spend or invest the money. Remember, you need to repay the loan thus you must put it to good use.

Advantages of Bridging Loans

Bridging loans presents a number of advantages. First, unlike loans that are issued by banks, you can qualify for a bridging loan against property that is broken down because the condition does not matter. Hence, you can be sure to get funds for repairs and renovations with ease.

Secondly, the application process is convenient and quick hence the loans can be authorized within a matter of hours.

Thirdly, these loans are flexible in the sense that you can use them for varied causes like renovation, land acquisition and debt consolidation among others. Lastly, the amount of money that you can receive is dependent on the value of the property that you put up as collateral as well as the repayment period. In summary, bridging loans are an excellent means of obtaining quick funding to close the gap in your real estate needs.

How to Apply for a Fast Bridging Loan in the UK to Relocate to France

OK so recently I’ve had a number of guys who are looking to relocate to France, but need to raise quick capital. Sometimes I will offer the advice of them going down route of taking out a briding loan. It’s doesn’t suit everyone – so read my views on it below.

How can you get a loan when your family needs a new house but you haven’t sold the old one yet? Is there any way you can get moving before selling your home? A fast bridging loan in the UK may be your solution. You can gain quick approval for a bridging loan so you can purchase your coveted property before you have sold your current home.

For any number of reasons it can take a long time to sell a house. A bad economy or an old house in need of renovations can cause slow sales. Many other considerations can affect why your house hasn’t sold yet. The price may be too high. Your realtor may not be doing their job, focussing on other properties first. But you have run out of time and there’s a beautiful new house on the market that would be perfect for your family.

Sometimes a major bank will turn down your loan as you are self-employed and can’t verify your income. Perhaps you had a sale on your property fall through but you really need to get moving. Maybe you bought a house through an auction and they need their payment immediately. A fast bridging loan can fill this gap until you can get your first property sold.

The state of the economy has caused banks to be wary in handing out mortgage approvals even though debtors have proven to be reliable borrowers in the past. A fast bridging loan in the UK may be your solution to your loan problems.

Just how can you apply for a fast bridging loan in the UK? You can use your current home as collateral for a loan so you can buy your new home. When your first home sells you can pay off your bridging loan or choose to use the money to renovate your new home.

Most lenders have a website where you can fill out an online form in order to be approved. Applying for a fast bridging loan in the UK is an easy process. Be sure to collect all the information together that you’ll need to apply for your loan. Bank account balances, credit card debt, car loans, and school loans will all need to be reported.

A bridging loan can be used for any purpose, not just for a mortgage. They cover the gap between the banks and your mortgage needs. You may need to do renovations on your home or buy new appliances. With bridging loans you can borrow from £15,000 to £5 million. There are no charges to apply and interest rates start at an affordable 1% per month. Consider how much money you need for your loan.

Be prepared for extra fees should your loan be approved. As with regular mortgages there may be completion and valuation fees added, should the loan be approved. Insurance is available for an extra charge so set some cash aside for that.

Fast bridging loans in the UK are flexible no matter what type of loan you are applying for. You can use them for residential or commercial properties. Loans may be paid off before the due date or converted to longer terms.

By knowing how to apply for a fast bridging loan will help you on your way to making your dreams come true.

Why Bridging Loans Are Still Relevant in Today’s Mortgage Market

Many of my clients have taken advantage of bridging loans to help them to get quick finance for a house and property purchase – they are quite handy when it comes to getting mortages through quickly.  Having said that, bridge loans have often been at the centre of controversy since they have been linked to causing economic turmoil as a result of a credit bubble.

However, these particular loans have been used for decades as a means to ensure that a families and business will have adequate funds to protect their personal investments. By exploring two different ways an individual or commercial interest could benefit from these loans, you will see that they are still a relevant option in today’s market – I will only recommend a bridge loan if I feel that my client will benefit from it financially – if it’s something you are considering then you can contact me as an independent IFA (Independent financial adviser).

1. Residential Bridging Loans: One of the best ways that bridging loans have been used in past years is by allowing a family to tap into their illiquid resources while preparing to move into a new house. The usual reason that a bridge loan is needed is for a down payment on a new house while the old one has not yet sold. This is done by requesting a line of equity on the home that you still own and then using that money as a down payment on the new home. This will allow you to bridge the gap in finances and time. While there is an inherent risk to this situation, an open bridge loan with allow you to pay the loan back over time, usually two to three years, giving you the chance to settle your finances after the move.

2. Commercial Bridging Loans: While loans used for the purposes of businesses have been painted as a nefarious source of corruption, there are several cases where they can be the difference between getting a job completed or remaining as blueprints. Many commercial entities do not have the liquid resources to begin a large-scale job. In order to prevent the companies who do have large quantities of money from marginalizing smaller businesses, there are commercial bridge loans. Essentially, businesses take a full-risk, open loan that has exceptionally high interest and begin a job such as building a hotel or building an addition before they have acquired long-term financing. The risk comes from the fact that the long –term financing may never be approved, leaving the commercial business saddled with debt, but a wise businessman would never dedicate themselves to a new venture without a certain degree of sureness.

While these two types of loans represent the most common types of bridging loans that are granted to this day, there are many other ways that they may be utilized to benefit individuals looking to get a start in business or families looking for a new home. While any loan presents an inherent risk, when used wisely, bridging loans are a relevant source of short-term financing.