5 Surprising Benefits of Using a Bridging Loan to Buy a House

A bridging loan is a type of loan that can be used to help finance the purchase of a new home before the sale of your old home is complete. Bridging loans are typically short-term loans, lasting for a period of six months to two years. 

The main advantage of a bridging loan is that it can provide you with the funds you need to buy a new home before you have sold your old home. This can be a huge advantage if you are looking to buy a new home before your old home has sold, as it means you will not miss out on your ideal home. 

However, it is important to remember that bridging loans can be a more expensive option than other types of loans, so it is important to compare the cost of different loans before you decide which one is right for you.

Here are the surprising benefits of this loan type:

1. It Saves You from the Cost and Stress of Moving into a Rented Home

A bridge loan is a type of loan that allows you to borrow money against your current home to purchase a new home. This can be helpful if you have yet to have the full money saved up to purchase a new home outright. Once you sell your old home, you can pay off the bridge loan and use the rest of the money towards your new home.

2. It Lets You Enjoy a Broader Choice of Properties

Bridging loans can give you the freedom to purchase any home you want—as long as it's within your budget. You're not limited to just the homes currently on the market. This can be helpful if you find a home you love, but it still needs to be put for sale. However, you should think carefully before taking out a loan like this, as it puts your home at risk. If you move quickly, you can buy a property for less than the market value.

3. It Lets You Buy Time to Get a Good Price on Your Old Home

A bridging loan gives you more time to sell your home so you can get a better sale price without being pressured into accepting a low price. However, consider the cost of the loan when making your decision.

4. You Can Buy and Renovate a Damaged Property

A bridging loan is a type of loan that can be used to help purchase and renovate a property that is in a poor state of repair. This type of loan can be helpful if you cannot get a traditional loan from a mainstream lender. You may also get a refurbishment loan to finance the purchase and renovation of a property. 

5. You Can Buy a Property at an Auction

If you are the successful bidder at an auction, you must pay ten per cent of the purchase price on the auction day. The remaining balance will be due within 28 days. A bridging loan may be necessary to cover this amount until your property is sold or your mortgage comes through.

Conclusion

Overall, a bridging loan can be a great option if you want to buy a house. This type of loan can help you bridge the gap between the purchase price of the house and the amount of money you have available for a down payment. Additionally, a bridging loan can help you to avoid mortgage insurance.

Property Link Homes is a mortgage broker based in Ripon, offering services nationwide. We believe everyone should have a broker that works to find the best deals and the right protection suited to you and your loved ones. We provide mortgage advice, home insurance or buildings and contents insurance, as well as protection, including life insurance, income protection and critical illness cover. We are also a provider of bridging loans in London. Finance your next home with confidence! Give us a call at 01765 360060 if you need a loan.