Do You Get the Loan on the Same Day You Apply

Most borrowers who opt for a bridging loan usually have immediate bills and other short term financial needs that need to be taken care of fast. The recession and the credit crunch has totally changed the lending market as funds are not as available as before yet demand for quick cash has significantly grown. Before, getting a personal loan or a home equity loan from most of the major financial institutions used to be just a rubber stamp process punctuated by a quick run of the lender’s credit card report. Now these same institutions have made the loan qualification and processing rigmarole too dauntingly rigorous and borrowers are increasingly turning to other forms of quick and affordable financing.

What Is Bridging Finance

Bridging finance or a bridging loan is a type of short term financing designed to help property owners or sellers to fulfill their short term financial needs and obligations as they await the completion of a sale. For example, if you were selling your house and buying a bigger house in a better neighborhood, you would most likely be paying a higher price than you are likely to receive from selling your old home. At the same time, you may want to complete the purchase of the new home and go through the expense of moving even before you receive any offers for your old home. Before you start showing the old home, it may need a new paint job and some repairs which will cost you some more. Bridging finance serves to equip you with the money you need for these undertakings mainly on interest-only terms as you await the completion of the sale of the old home and the completion of the mortgage financing for the new home.

How Long Does The Approval Take

Given the reluctance of major financial institutions to offer home equity loans and other short term loans based on real estate values, smaller institutions have taken up the burden of financing home owners. The advantage of this is that smaller lenders usually are easier to work with and their loans offer better terms. If all your documentation is correctly submitted and you have a good credit score, then the likelihood of receiving your cash on the same day are very high.

Things to Consider When Taking a Bridging Loan

Bridging finance will go a long way in removing financial gaps when selling or purchasing property. When thinking of obtaining bridging loans, there are a few factors you need to consider. First, you have to determine how long you need the financing for. Since bridging finance is a short term measure, it is best to make an estimate of less than 6 months. However, you can also plan on a 2 year time frame especially if the property seems hard to sell. Another factor to consider is whether the property you want to sell has any unconditional contracts. You will also need to factor in whether the new home is newly built and whether the property is for residence or investment purposes. Finally, and most importantly, you have to carefully assess your ability to repay the loan.

Necessary Documentation

To achieve this same day service, the most important step you should take before approaching the lender is to ensure that your credit report is correct and reflects a good credit ranking. This will not only speed up the process but will also get you better credit terms. Have all the documents and contracts related to the sale, purchase, and repair of the homes with you. Approach a loan market mortgage broker for a bridging finance per-approval to increase your chances of quick success. If you cannot get your loan on the same day, most lenders will process your bridging finance application within 72 hours (3 days).