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In the financial era, bridging finance is gaining quite popularity. The reasons are many but the most important is that, it provides lender the monetary gain in the time of real need. The loans come in rescue when you require hard core cash and all the other ways seems closed. Here I would like to quote an example that will justify my point in a better way. For instance When a person is buying another home prior to selling his in hand home, he will need money. The two options left with him are either goes for Bridging Finance or home equity loan. Now as a borrower you will like to know in detail about both the loans. I do agree that home equity loans are less expensive but bridging loans are more popular because of their benefits. Borrowers have better option open with bridging loans. Apart from this from perspective of lenders to home equity loans are less common and they generally not lend home equity loans. As a smart borrower you should prefer going for a comparable studies between two loans to analyze which is better, which is cheaper and go on head to head in situations. In this article I will discuss in detail about bridge loans. Defining Bridge Loans?
Bridge loans are provisional loans that link the gap amid the selling and buying of real estate. More clear to say, it can abridge your financial need when you have not sold your old home and want to buy the new one. The money you get from the bridge loan is further used as a down payment for the new home. Working of Bridge Loans
The working of bridging finance is very hard to answer as no lender follows the set of guidelines. Some lenders who make compliant about loans prohibit the bridge loan payment for meeting the criteria purposes. Let us look at the reasons behind the buyer on which two options…. • Generally buyers have mortgage on a present home.
• The buyer has option available to pay the amount before selling the old one.
• Off-course for a short time but the borrower will own two homes. In-case new home mortgage is a conforming loan; lenders have additional scope to admit a higher debt-to-income ratio by consecutively operating the mortgage loan via an automatic guarantee program. Generally new home mortgage loan is a heavy loan and bridging finance is suited for heavy loans and thus most preferred borrower. Benefits of Buying Home from Bridging Finance
• The buyer can straight away put a house on the market with no restrictions.
• Bridge loans do not attract monthly payment for few months.
• If the buyer has made a conditional offer to obtain the seller issues to sell and move forward with the purchase. Mike John is a well known Financial Consultant. He provide useful advice through his articles on Bridging Loan and Bridging Loans.
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