Be cautious before taking a bridging loan

Bridging loan is fastest mode of solving an immediate cash requirement for a purchase of new property. Other than this, there are many other benefits attach with the easy bridging finance. However one should always move with the caution even procuring this easy loan. We have highlighted some precautions which should be undertake or analyzed before taking up a bridging loan

1. Shop well in the market, as there are good numbers of Bridging finance lenders available who are ready to avail their services to you, you just need to locate the ideal bridging loan lender.

2. Make sure that you pick up a good deal which charge the minimum amount of interest and offer easy payment installments. The payments on your bridging loans are not due until you sell your old house.

3. The total amount you receive as bridging loan is generally 70-75% of the collateral property value minus any previous mortgage on the property. Ensure that you are able to receive not less than amount specified above.

4. Your collateral property is at risk in case you are not able to repay the loan amount. So make sure that you pick up bridge loan only in case you have the ability to repay the entire loan amount.

5. Generally the lenders propose to extend the time period of bridging loan in case you are not able to repay the amount on time. However, the interest rate charge on the loan is cumbersome. So additional time period means additional interest rate

We hope that this piece of information serves the purpose of creating awareness about Bridging Loans and help you take a wise decision.