Bridging Finance for Property Sourcing Professionals: How to Fund Your Next Property Purchase Quick
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Jan 03
4 min
Bridging finance can be a useful tool for property investors looking to bridge the gap between buying and selling a property. It is a short-term loan that is often used to bridge the gap between the sale of one property and the purchase of another. This type of finance is especially useful for property sourcing professionals who are looking to buy a property quickly, and who need to secure funding quickly
In this blog, we will explain what bridging finance is, how it works, and how it can be used in the property sourcing industry.
What is Bridging Finance?
Bridging finance is a short-term loan that is used to bridge the gap between the purchase of a new property and the sale of an existing one. It is a type of finance that is often used by property investors, developers, and property sourcing professionals to fund property purchases quickly.
Bridging finance is typically more expensive than traditional forms of finance, such as mortgages, but it is often faster to secure and can be more flexible. It can be used for a wide range of purposes, including purchasing a property at auction, refurbishing a property, or buying a property that is in need of renovation.
How Does Bridging Finance Work?
Bridging finance is a short-term loan that is typically secured against a property. The lender will typically require a first or second charge on the property, which means that if the borrower defaults on the loan, the lender can take possession of the property and sell it to recover their funds.
Bridging finance can be arranged quickly, with some lenders able to provide funding within a matter of days. This can be useful for property sourcing professionals who need to move quickly to secure a property before it is snapped up by someone else.
The terms of a bridging loan can vary, but typically they are for a period of between six and twelve months. The interest rates on bridging finance can be higher than those on traditional mortgages, and lenders may charge arrangement fees and other charges.
How Can Bridging Finance Be Used in the Property Sourcing Industry?
Bridging finance can be a useful tool for property sourcing professionals who are looking to buy a property quickly and need to secure funding quickly. Here are some examples of how bridging finance can be used in the property sourcing industry:
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Purchasing a property at auction: Bridging finance can be used to purchase a property at auction, where the buyer is required to pay a deposit on the day of the auction and complete the sale within a specified timeframe. Bridging finance can be used to fund the deposit and complete the purchase quickly, before the deadline for completion.
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Refurbishing a property: Bridging finance can be used to fund the refurbishment of a property. This can be useful for property sourcing professionals who are looking to add value to a property before selling it on.
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Buying a property that is in need of renovation: Bridging finance can be used to purchase a property that is in need of renovation. This can be useful for property sourcing professionals who are looking to purchase a property at a discount, and then renovate it before selling it on.
In conclusion, bridging finance can be a useful tool for property sourcing professionals who are looking to buy a property quickly and need to secure funding quickly. It can be used for a wide range of purposes, including purchasing a property at auction, refurbishing a property, or buying a property that is in need of renovation. However, it is important to be aware of the risks associated with bridging finance, such as higher interest rates and fees, and to ensure that you have a solid exit strategy in place before taking out a bridging loan.
