Private Bridging Finance Could Hold the Key to Your Next Property Purchase
Finding your dream property can often take months or years of searching, so when the right one comes along, it’s vital to be in a position to move quickly to avoid missing out. But what if you’re waiting for the sale of a current property you own to complete? If this sounds familiar, private property finance could be the solution.
Previously only associated with property developers looking to fund building developments and refurbishment projects, the short-term finance sector is now broadening its appeal to a much wider audience.
Designed to bridge the gap between the length of time it takes to sell an existing property and buy a new one, private bridging finance can be an attractive option for property owners looking to make a new purchase without wasting time selling their current one first. Private property development finance or private development finance as it is also known, can also be useful for buyers who need fast access to funds to buy a property at auction.
And the good news is it’s more attractive than ever before. The arrival of challenger banks, combined with a wider selection of new products on the market, is leading to lower finance rates and higher standards of service, making this type of short-term flexible finance an easy solution for anyone who needs quick access to funds, not just property developers.
Some of the key benefits of private bridging finance include:
- Quick Access to Funds – short-term property finance lenders can secure and deliver money in days, rather than the weeks or months it would take a commercial bank to make funds available. This means less waiting around for Borrowers and a reduced risk of losing out on securing their next purchase.
- Greater Eligibility for Borrowers – unlike traditional lenders, short-term finance specialists do not necessarily exclude individuals with historical issues such as poor credit or bankruptcy. Specialist lenders are more likely to say ‘yes’ to a borrower who may already have been refused a loan from a high street bank or another financial institution.
- Flexible Rates – specialist lenders can be much more flexible than commercial banks in terms of rates and deals, which in private bridging finance are generally shaped to suit the requirements of each individual borrower.
- Affordable Finance – while a bridging loan typically has a higher interest rate than traditional methods of lending, there are no rising interest rates to consider as the loan is usually paid back within a matter of months, making this type of short-time private property finance a relatively affordable solution.
As with any type of lending, there are risks attached to private bridging finance and borrowers should always have a realistic exit strategy in place. If the sale of your current property takes longer than anticipated, for example, this is likely to extend the term of the loan so it’s important to choose your lender carefully and establish a good relationship with the decision-makers.
While price is a key factor in choosing a lender, you should always do your research, learn as much as you can about the people you are dealing with and find out what their stance is on extensions, renewals and defaults should anything go wrong.
Established and trusted market leaders, Mint Property Finance, takes a personal approach with every client and the lender’s team of private property finance experts can advise on the most suitable type of private bridging finance, depending on the personal circumstances of each individual client.