Are you stuck with a bridging loan?

Bridging loans are a great resource for the property professional and allow a faster purchase of a property, help a purchase to go ahead when the property is not “mortgageable” (ie it may not have a bathroom or a kitchen or might need other renovation to make it habitable) or to free up capital locked up within a finished project due for sale.

Whatever the reason for taking a bridging loan one thing is always important – you should not enter a bridging loan without an eye on the exit.

But, as they say, “There’s many a slip twixt cup and lip” – things can go wrong with even the best planning – so how can help when you are stuck in a bridging loan?

Bridging loan exit options

There are only two means to plan a bridging loan exit, others such as lottery wins, windfalls etc leave too much to chance. You should plan one of these two options;

Selling might not be the fastest way to repay the bridging loan you are stuck in but it is the way which will release the most funds for you to move onto the next project. The main consideration though must be the time it would take to complete a sale and the monthly cost of the bridging loan, especially if it is due to go into default. In order to complete a fast sale many sellers turn to an auction – the sale can be completed within a month (typically) of the auction date but due to the limited market the price will be “rock bottom”. A traditional sale through an agent or personal contacts could take much longer, many weeks or months, especially if your property is unusual, commercial or in an area where demand is more limited. If all this is likely to take too long to complete then it’s time to look at option 2 – Refinance.[/ms_accordion_item] [ms_accordion_item title=”Refinance” icon=”fa-refresh” status=”close”]There are many refinance options to free you from your bridging loan, all of which will depend on your overall property strategy and plans for this property. Click for more information. are able to advise on the best short term and long term finance solutions for your bridging loan exit plan. Please get in touch using the link below.

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