The bridging loan may actually be used for several different things, however the most common reason that people get bridging loans today is the purchase of a new home. The majority of people who elect to get a bridging loan already own a home and are trying to get their next home. The reason that a bridging loan may become necessary is because the traditional lenders like the banks and credit unions may not be willing to extend any more loan money to the homeowners until the first home has been sold. This article will try to help you decide if a bridging loan is the right choice for you during your home purchase.
One situation in which you should strongly consider getting a bridging loan is when you have found the home of your dreams but you fear it is about to slip out of your grasp because your bank is taking so long to process your application for extra funds. With large loan applications, it is not unusual for banks to take a very long time, perhaps weeks or longer, to finally get the application processed. By the time they approve or deny your application, it might be too late for you to get the home you wanted because it sold to someone else with quicker access to the funds needed. However, a bridging loan will usually allow you to get the money needed in your hands very quickly, often within just days.
Another time that you really should consider working with a bridging loan lender is when you feel strongly that your home is going to sell quickly. Essentially, this means that you only need a short term loan since your current home will likely sell fast. It is often considerably easier to work with a bridging loan company to get a short term loan than it would be to deal with the headaches of asking your bank for such a loan.
The Euroguide is a very helpful resource regarding bridging loans if you would like to get some additional information on the subject. You can find the Euroguide site on the Web here: euroguide.org/what-is-a-bridging-loan/bridging-loans-for-house-purchase/. It will give you the guidelines you need to determine if a bridging loan will work in your case, and even has some lending options listed.