Open Bridging Loans
What are open bridging loans?
The open ended bridging loan allows for the loan even when the sale of the existing property is not pending. This type of advance is a short-term credit that is used in situations where the sale of property is delayed and there is a need for cash to complete the purchase transaction. There are two types of these advances, open and closed.
Quick Short Term Finance
This type of advance offers the payment quickly. The payback on the credit is short term, usually within 6 to 9 months. This timeframe is important because you will need to repay the money in its entirety within this time period. The open ended bridging loan is secured by the property, so if you default on the payments the bank or lending agency can repossess the property for non-payment.
Need exist strategy
The main feature of this advance is that it allows you to borrow money even though there is no pending sale on the existing property. This makes it imperative that you will be able to sell the property within the time of the credit terms. The lending agent may ask to see information about the property including a current appraisal. They may also request information about the home value as well as how much other similar homes in the area have sold for and their value.
All types of credit history considered
The open ended bridging loan may take longer than other types of loans to complete. The typical time for this credit should take only a matter of a week or so from start to finish. This advance may take up to a week or longer, depending on what information the lending company requests. If you think that you may need to pursue this type of advance you should prepare as much as you can ahead of time for it. Having some of the legwork done in advance will help shave off precious time at the end.
Short application process
To prepare for an open ended bridging loan start with a new property appraisal. A comprehensive appraisal can provide all the information needed including the comparative information the lending company may request. The appraisal may take a week or two to complete, so having this done ahead of time will greatly shorten the credit approval period.