What stands between you and being able to purchase the home of your dreams could be as little as ?10,000 or more than ?500,000. Of course, you have an excellent plan all laid out and you only need a short-term loan to cover the difference, but the bank that approved you for a home loan simply won't listen. This is when a bridging loan now only makes sense, but it may just be your only option. So, why use a broker to find the very best bridging loan deal? Up ahead are the reasons why you should definitely utilise the services of a skilled broker when getting into a bridging loan contract.

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The Purpose of Bridging Loans

Bridging loans are invaluable to property investors, business owners, and normal consumers looking for a helping hand. In short, when there is a gap between the money you have on hand, the loans you have been approved for, and the investment or purchase you want to make, there is a need for a bridging loan. A restauranteur might use a bridging loan and finance calculator to determine how much must be paid on a loan before determining if their restaurant can, in fact, be expanded. While you might need money for a project, renovation, expansion, et cetera, doing the maths tells you if you can afford to go through with financing.

How a Broker Will Help You Get the Best Bridging Loan Available

To understand how bridge loans work and why they are needed, one should first consider what purpose bridging finance serves. Say you owned a beautiful home that was fully paid off and the plot of land directly next to it was finally listed for sale. You might be able to sell some personal items or even cash out some stocks to fully pay for the land outright, but you have to come up with the funds right away. Obtaining financing with the best bridging loan rates would enable you to make the purchase now without paying a small fortune in fees. Working with a broker will help the deal to go through seamlessly, and you will also have the benefit of knowing that you qualify for the best rates.

Considering the Interest Paid on Bridging Loans

With a bridging loan, please note that you will be paying a higher interest rate than you would pay with a traditional mortgage. So, someone needing a bridge look may be quick to be approved, however, it is up to the consumer to scrutinise the terms of the deal. Is there going to be a balloon payment due, and are you capable of coming up with a large sum of cash to satisfy that final loan payment? Did you use a bridging loan calculator to calculate precisely how much money you are paying to get this project underway, including fees and compounded interest? These are difficult questions to answer, but a calculator and an educated broker can truly help you out.

How Common Are Bridge Loans?

There are various statistics that outline how often people in the UK are approved versus denied for traditional home loans, but there is less information on bridge loans. At the same time, it is quite true that bridge loans are becoming more common. People with non-traditional incomes like settlement recipients have found bridge loans to be the answer to their troubles when traditional banks say no.

Traditional loans, particularly those issued to consumers looking to purchase a home are based on the credit, debt to income ratio, and income of the applicant. As such, it is worth noting that traditional lenders don't take unnecessary risks and are not in the business of lending more than they feel comfortable doling out. If you want to purchase property and can't get financing for the full LTV, bridge the gap with a bridge loan.