Bridging Loans: Not As Fast As You Might Think
With all the different types of loan on the market today you wouldn’t be blamed for not being entirely sure which form of finance is best suited to your situation. One type of loan, a bridging loan, is designed to literally ‘bridge the gap’ between a cost you must pay and your main line of credit becoming available.
A bridging loan is most commonly used by landlords, amateur property developers, and those who wish to buy a house at auction or sell property quickly after renovations. Bridging loans are also increasingly being used by professional property developers in order to increase their portfolio and therefore their profit.
If you’ve looked into the bridging loan market recently you’ll have seen any number of adverts claiming you can get your cash within 48, or sometimes even 24, hours.
Are these claims too good to be true?
Industry experts will tell you that a non-status bridging loan, one that is offered regardless of your income or credit history, is the fastest way to raise cash and could indeed give you the money you need within 24 hours. All you need to qualify is to have property equity that meets the lender’s criteria.
Is it really that easy?
In theory, yes you could get the money in as little as 24 hours. However, putting yourself in a position where you need to test this theory is not a wise financial move. There are a number of steps that must be completed and plenty of things that could go wrong so making sure you have all your ducks in a row before you apply for finance is essential.
How can I get the money within 24 hours?
We all know that there are no guarantees in life but there are things that you need to do before you can move on to the next step. Being approved for a bridging loan is no exception.
For fast loans to be completed you’ll have to complete some paperwork and have a few things in place before the lender will find your application acceptable. These things include, but are not limited to:
- A surveyor approved by the lender must have carried out a recent valuation on the property
- Your solicitor must have done essential background work including “searches” and be in possession of the title deeds and other necessary paperwork.
- Solicitors working for all parties must be ready for action and prepared to move quickly. If you are making a purchase this will include the vendor’s solicitor.
You should also be prepared that even when you do have all the above steps complete there are always unexpected questions that could be asked and problems that will need dealing with.
What is a more realistic timeframe?
If you don’t need to have the money within 48 or 24 hours then you’d be advised to set aside 10-15 days for bridging finance application completion. There’s no point causing yourself unnecessary stress!