Popularity of bridging loans calls for specialist legal help
For quite a few years now the appetite for bridging loans has grown, especially in London and the surrounding areas.
Bridging loans are simply so borrowers can get property purchases over the line quickly to secure their dream investments and homes.
Ordinarily, they are used when there is a shortfall between the sale and completion dates in a chain and are also favoured by those buying at auction, or people who plan to own a home only for a brief period.
A good example is for people buying to renovate and then putting a property back on the market in the hope of making a good profit.
Of course, putting in an offer on a property without having a buyer for your existing one can be risky, because some vendors will only accept an offer if the property you are selling is already under offer.
The bridging loan helps buy a new property before you have sold your existing home, yet the chances are despite being heavily in debt for a while, it is a risk many think is worth its while.
We urge all those who are thinking of a bridging loan to first really understand the borrowing because it’s more complicated than it looks.
After all, short-term bridging loans usually involve high-interest rates and fees because the money is often needed quickly, but it is vital to understand just how high those sums are. They can include fees in the small print, such as arrangement fees, exit fees, valuation fees etc.
The vital point is to be completely clear on what all fees and ramifications are, and how they will be funded.
Additionally, a main condition of the loan is likely to be that you provide certain security to the lender, often in the form of a charge over the property.
Whatever security is being granted over, the huge risk is that, if you breach a term of the loan, the lender will usually be able to start legal action to repossess, so ensure you can comply with the terms of the loan. Also, lenders have their own pre-loan enquiries.
In all, the process of dealing with bridging finance is a complex and fraught subject with many pitfalls. Therefore, it is wise at the very start of thinking of such an option to speak about bridging loans or other options involving financing or refinancing with legal experts who can ensure you do not make any costly errors.
An experienced bridging loan solicitor will ensure these enquires are dealt with to the lender’s satisfaction. However, it is common for lenders to require a host of documentation, which you need at the start of the transaction, so you are well prepared.
It is worth adding that at Pindoria Solicitors have an extensive team of experts highly experienced in dealing with bridging loans, making us one of the finest of London’s legal property experts in bridging finance. We are happy to guide you through the process.
Please email Bharat Pindoria at firstname.lastname@example.org if you have any questions about bridging finance.
- Homeowners win battle to claim against menace of knotweed
- The best law firms need to cater for the elderly
- Estate agents referrals questioned by public who value word of mouth
- Banks show why wills and inheritance are best left to solicitors
- Offshore assets require new transparency and legal expertise