Bridging loans are taken when you need substantial amount for a short term usually either for building a plot or purchasing property. These loans are taken to bridge the gap between sale and purchase of your property. These loans can be taken in any situation, like if you wish to purchase property at auction or if you want to buy a new property but have yet not completed the sale of existing one.

The property accepted for bridging loans is:-
Development sites
Retail shops
Auction properties
Commercial and semi commercial property

Bridging loans are offered in two forms open and closed. Closed bridge loans have been tailored for those home buyers who have already exchanged their intended purchase property. Whereas, open bridge loans are meant for those home owner who have found not found any buyer or haven’t yet completed sale of existing one. The interest rate on open bridge loans is slightly higher as compared to closed loans.

Bridging loans are secured in nature. This means that you have to pledge your property or land as collateral against the loan amount. The loan amount may range anything from£100,000 to £400,000. At maximum you can borrow 85% of market value of your property but in certain cases you may get up to 100% of the market value if you pledge additional property as security. Loan amount may vary depending your financial soundness and repayment ability.

The bridging loans are normally repaid within a term of 1-12 months. These loans are short term loans and don’t consume much of your time in approval.

Bridging loans have generally higher rate of interest but with little research online, one may find a suitable deal. Different lenders have different quotes so one may choose the best possible deal easily. Also online application is much easier and time saver.

Bridging loans are open to all types of people like self employed, individuals and companies. Borrowers with bad credit scores such as CCJs, IVA, defaults, arrears and late payments can also apply for bridging loans.

Peter Taylor
http://www.articlesbase.com/loans-articles/bridging-loans-bridges-your-financial-gap-748445.html