A bridging loan is a loan facility that is extended to s person who is intending to buy a new house after selling the one that they have. It aims at eliminating the delay that people have to wait when selling their house or homes , which they currently own in order to buy other ones. There are many chances that people end up losing the house that they intend to buy when they delay in selling the one that they own as they lack the funds. A bridging loan ensures that you won’t lose an opportunity due to lack of money.
Once the loan is advanced, it should be repaid within a specified period of time during which you are expected to have found a buyer for your house. Usually, no principal is paid; only interest. in some cases, the interest accrued during this period is loaded on the loan. The house that you currently own acts as the collateral for the loan that you will be taking.
In most cases, people do not usually take a loan corresponding to the value of the house that they intend to buy. They will take a loan equivalent to the downpayment of the house. This is because after paying the agreed downpayment, one is allowed some time to raise the rest of the amount, usually 90 days.
During the 90 days window, one is expected to have disposed of their house and received some payment. Taking the downpayment alone ensures that you do not end up paying too much money on the loan.
A Bridging Loan Broker
This is a person who acts as a link between the borrower of the bridging loan and the lender of the money. They usually help the buyer in getting a loan under favorable terms from the lender.
As a buyer, when choosing your bridging loan broker, it is important to exercise some bit of caution to ensure that the person that you hire will be up to the task. A bridging loan broker is an important person in the transaction as they might determine whether or not you will get the loan and at what cost.
What to Look for In a Broker
As such, when selecting a broker, there are a number of things that you need to look at. Not all brokers that you find on the streets should be trusted. You need to take your time and study them if you are to meet your set goals. Below are the essential qualities to look at:
Trustworthy and Dependability
Your broker should be a person that can be trusted and depended upon. If they promise to schedule a meeting at a certain time, the meeting should happen without any excuses.
When looking for a bridging loan, you usually do not have much time since you might not be the only one interested in the house, As such, your broker should be time conscious to help you close the deal within the shortest time possible.
A good broker is the one who is straightforward in disclosing all the terms of the contract. You should ensure that you are fully aware of the fees that you will be paying at the onset of the arrangement.
These are some of the qualities of a good broker, be careful when choosing a broker as they will greatly influence how well the bridging loan assists you in meeting your set objectives. The best way to get a good broker is through referrals from family members and friends.…Read More