Bridging loans and development finance loans for builders, can also allow you to buy land or develop a commercial property while you wait for another type of funding. Bridging loans help many people finance property sales transactions that might otherwise be impossible for them to complete.
If you have bad credit, this does not usually interfere with getting approved for a bridging loan if the bad credit is historic and can be easily explained. Even if your poor credit record is related to property, if your lender can determine that it should not be a recurring problem, the lender will most likely approve your loan. Bridge loans allow the borrower to have some degree of control concerning repayment options. This fact can help you avoid any damage to your credit score from late payments or delinquent fees due to inconvenient fixed repaying dates. In addition, this type of loan can enable you to improve your credit score significantly if you make timely repayments.
It is true that you may need longer-term credit in order to complete the repayment of your bridging finance amount. Yet if you are avoiding damaging your credit score with doable repayment terms, you may not find the longer time necessary for repaying your loan. Even if your loan interest rate is higher than the rate on a traditional mortgage, if you can make timely repayments, building good credit as you make regular repayments on time may justify paying the higher interest amount. Even if some extra legal or administrative charges are due on your loan, you can repay these amounts without falling behind on payments when you have a reasonable repayment schedule. This information should help you to determine, “Can I get a bridging loan with bad credit?“
If you have declared bankruptcy in the past, you can still apply for and receive bridging finance today. The ideal situation for ensuring approval of your loan is to have been discharged at least one year prior to your loan application. This will assist you in getting sensible interest and fee rates that are practical and doable. However, you must be able to give strong evidence that you have a firm and reliable exit plan such as a mortgage or a newly secured loan. Another option is to offer to sell your property if you cannot cover the total loan repayment in another way.
Bridging loans are classified as non-status loans. For this reason, lenders are often more lenient in terms of requirements for gaining funding approval than for issuing other types of loans. Although bad credit will not prevent you from acquiring bridge financing, it can keep you from getting a good rate on your loan. The ideal solution is to work with a lending agent who will help you repair your poor credit in the initial process of obtaining your funding. You can now answer the important question, “Can I get bridging finance if I am a previous bankrupt?”
A Bridging loan example of a common type of bridging loan is one that will enable you to purchase a new home before the final closing date on the sale of your current home. This is a major issue that many homeowners must deal with to experience the smooth transition to owning a new residence. It is often not possible to get a mortgage on your new home before you make payment for the new property. If your current house has not sold yet, a bridge loan is the ideal solution. Once you have secured this short-term funding, you will have adequate funds to cover new property costs while you wait to receive the proceeds from the sale of your old home.
Bridge financing can save the day if you have a firm offer for the sale of your home, but the closing date is delayed. Without fast approval of some type of interim funding, you cannot move forward with buying the new home of your dreams. Yet if you can obtain a fast, efficient bridge loan in the meantime, you can feel confident in going ahead with the purchase of your new home regardless of the delayed sale of your old home. You can also cover any extra fees or expenses that may occur until both property sales are finalised. This is one bridging loan example that is needed quite frequently.
Don’t forget to read the other sections, for more information an help on understanding bridging loans and how they work.
If you need to understand how bridging loans work, or want help in securing a bridge finance loan, then get in touch.