So what is a bridging loan and why would I need one?
Ok, to start off. It’s not to build a bridge. A bridging loan or bridging finance as it’s referred to, is designed to give home buyers finance to purchase a property, whilst they are waiting to sell their current property.
To give a quick example: Imagine you are living in a house and want to buy another property but you don’t have the money, to make an offer because your money is tied up in your current home.
This is where you would need a bridging loan, to be able to buy the property whilst you’re waiting to sell your current property. This way you don’t have to rent short term, or worse, stay at mum’s and dad’s
Bridging loans are only a short term solution and often only last for six months. This is because when you sell your property, all the funds from that sale, go towards your existing property.