Buy-to-let and residential bridging loans
Buy-to-let and residential bridge loans are two types of bridging loans commonly used in the property market.
Buy-to-let bridge loans are short-term loans used to purchase or refinance rental properties. These loans are typically used by property investors who need to complete a purchase quickly or raise funds to refurbish or improve a rental property. Buy-to-let bridge loans are usually secured against rental property. They are repaid either through the sale of the property or through refinancing with a traditional buy-to-let mortgage.
Residential bridge loans are short-term loans that bridge the gap between purchasing a new residential property and selling an existing one. These loans are typically used by homeowners who need to complete a purchase quickly but are waiting for the sale of their current property to complete. Residential bridge loans are typically secured against the existing property and are repaid once the property is sold.
Both buy-to-let and residential bridge loans typically carry higher interest rates than traditional mortgages due to their short-term nature and higher risk. However, they can be a valuable tool for property investors and homeowners who must complete a transaction quickly or raise funds for property improvements. It’s crucial for borrowers to consider the costs and risks associated with these loans carefully and to work with a reputable lender or broker who can provide clear and transparent information about the loan terms and conditions.
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