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Bridging loans can be used for a variety of reasons and in the correct circumstances can be the ideal solution for short term finance requirements.
Here is a selection of bridging uses:
- buying a new property before selling your existing property
- buying a property at auction. Once the gavel falls, exchange of contracts has occurred and you must complete in 28 days. Most mortgage companies cannot guarantee to complete that quickly
- buying a defective property i.e. one that a regular mortgage lender would deem non mortgageable or on which the surveyor recommends a retention
- property refurbishment, buying a property, adding value and selling
- land acquisition while obtaining planning permission
- property development, buying a property with planning permission, knocking it down and rebuilding
- building a buy to let portfolio, buying a property, adding value and remortgaging on a buy to let mortgage based on the new increased valuation
- purchasing a property quickly for whatever reason
- haggling a good discount from the true value from a vendor desperate to sell by being able to complete within 10 days (in some cases the discount obtained can more than cover the cost of bridging)
- releasing equity quickly from your own property in order to:
- to buy a business or buy out your business partner
- to refurbish that property prior to selling for an increased value
- to invest in other property deals
- to buy a property abroad
- to pay a VAT or Tax bill
- to pay a divorce settlement
- a company raising money to cover a short term cash flow rather than go to their bank or when they have been turned down by their bank
- rescue package for homeowners who are facing or have been repossessed
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