How Much Is A Bridging Loan In The Uk?
How Much is a Bridging Loan in the UK?
What is a Bridging Loan?
A bridging loan is a type of short-term loan that is used to bridge the gap between the purchase of a new property and the sale of your existing property. The loan is usually secured against the existing property and it is intended to provide you with the funds you need to make a purchase quickly, until your existing property is sold. Bridging loans in the UK are typically offered for up to 12 months, but can be extended up to 24 months.
How Much Does a Bridging Loan Cost?
The cost of a bridging loan will depend on a number of factors, such as the amount borrowed, the time period of the loan, the lender, and any additional fees associated with the loan. Generally, the cost of a bridging loan can range from 0.7% to 1.5% per month. This means that if you borrow £100,000, the cost of the loan could range from £700 to £1,500 per month.
What Other Fees Should I Be Aware Of?
In addition to the cost of the loan, there are usually other fees associated with bridging loans. These can include arrangement fees, early repayment fees, legal fees, and valuation fees. It is important to check with the lender to understand exactly what fees are associated with the loan.
Are There Any Other Considerations?
When considering a bridging loan, it is important to factor in the potential for negative equity. This is when the amount you owe on your existing property is more than its value. Negative equity can be an issue when the loan period is extended past 12 months, or if the value of the existing property drops during the loan period. It is important to consider these potential risks when taking out a bridging loan.
How Can I Find the Best Bridging Loan in the UK?
Finding the best bridging loan in the UK can be a challenge, as there are many lenders offering different terms and conditions. It is important to compare lenders to find the best deal. It is also important to choose a lender that is regulated by the Financial Conduct Authority (FCA). This will ensure that the lender is trustworthy and that their services are of a high standard.
Conclusion
A bridging loan in the UK can provide a quick and easy way to purchase a new property. However, it is important to factor in the cost of the loan and any additional fees that may be associated with it. It is also important to choose a lender that is regulated by the FCA. By comparing lenders and understanding the terms of the loan, you can find the best bridging loan to suit your needs.
Post a Comment for "How Much Is A Bridging Loan In The Uk?"