Bridging Loans

A bridging loan, (or bridge loan), is a short-term loan intended to 'bridge the gap' between buying a new house and selling your previous property.

Bridging loans can also be useful when used as a short-term loan to help you buy a property at auction, when money is needed immediately, as you may not have sold or concluded the sale of your current property yet.

Bridging loans are also typically used for property development, some Buy-to-let investments, business ventures, to pay a tax bill or even for a divorce settlement.

There are two types of bridging loan, closed and open. A closed loan comes with a fixed repayment date and you will normally be given this kind of loan if you have exchanged contracts but are waiting for a property sale to complete. An open loan doesn't have a fixed repayment date, but you will normally be expected to pay it off within one year.

Whichever type of loan you take out, the lender will usually want to see evidence of a clear repayment strategy (or exit route), such as using equity from an owned property or taking out a mortgage.

Bridging loans can be invaluable in facilitating a property purchase that otherwise might not be possible. As you might expect with a stop-gap measure, they can be significantly more expensive than a 'normal' loan.

There are numerous active lenders and hundreds of products on the market as well as varying fees, unique features and requirements to be considered and examined when searching for the right bridging finance. Therefore, it is advised to have professional assistance to ensure that your demands and needs are being met. At Windom Finance we will search for the right product, from the right provider, to meet your specific demands and needs.

Bridging finance is secured against your property. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.

The Financial Conduct Authority does not regulate some forms of bridging finance.