BRIDGING LOANS - NOT ALL PLAIN SAILING
For most people the first step towards getting a quick house sale normally involves a trip to an estate agent. Once there they will put their house on the market and they will also examine other properties for sale, not only to compare prices to their own but also to begin the process of trying to find their next home.
If they are lucky they might find the Holy Grail of buying and selling a house - a quick sale of their own property and finding a dream home to move into. If all goes to plan and there are no complications, within 3 - 4 months the move could be completed and they will be wondering why people make such a fuss about selling their home.
In an ideal world all property sales would take place in this way. But at HBFS we know this is not always the case. In many cases the more likely outcome is that you find your next property long before you have secured a quick sale of your own.
This means that if the seller of your new home is unable or unwilling to wait for you to secure a sale, you will be faced with a difficult decision. Do you let your dream home slip through your fingers or do you take a financial gamble by buying your new home with alternative finance arrangements while hoping for a quick sale of your old one.
The most common way to finance the purchase of a second home is with a bridging loan. This, however, is not without drawbacks.
- Bridging loans are primarily designed to be short term solutions and as such carry high interest charges. Make sure you can afford the financial burden of paying both your mortgage and your bridging finance.
- Are you confident of a quick sale? If not you could be looking at months before you relieve the financial difficulties of paying for two properties.
- With an ever changing housing market what happens if property prices fall? When you finally secure a sale of
your home will there be sufficient funds left from the sale to pay off your outstanding financial liabilities?
Looking at all of these factors means that at HBFS we believe that bridging loans are an unnecessary and high risk way of securing that dream home. We offer flexible financial solutions with a guaranteed cash sale allowing you the freedom to move on with your life.
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