With house prices continuing to rise in many parts of the UK, it can be hard for first time buyers to get their hands on a property. However, there are ways that you can bridge the gap and get onto the property ladder.
What is a bridging finance option?
A bridging finance option is a short-term loan that allows first time buyers to purchase a property without having to borrow from a traditional lender. Typically, the loan is set up as a bridging loan, which means it will be paid back once the purchaser has sold the property or when the mortgage on the property has been paid off.
Pros and Cons of using a bridging finance option
Bridging finance is a great way for first time buyers to get into the property market, but there are some pros and cons to consider. Here are the key benefits of using a bridging finance option:
– It can help you get into the property market quickly, without having to take on too much debt.
– You won’t have to pay interest on your bridging finance loan, so it’s a cost-effective way to borrow money.
– You may be able to get a lower interest rate than you would if you used a conventional loan.
– A bridging finance option can also help you save money in the long run if you decide to buy a property later on.
How bridging finance works
Bridging finance is a popular way to help first time buyers into the property market. It allows you to borrow against the value of your current property, which means you can afford to buy a property that is more expensive than you would be able to on your own. The best part is that bridging finance can be arranged through your bank or lending institution, so there’s no need to go through a third party. Here are some tips on how bridging finance can help you get started:
1. Research what types of bridging finance are available to you. There are several different types of bridging finance, including interest-only loans, fixed rate loans and balloon loans. You’ll need to decide which type of loan is best for you and your budget.
2. Talk to your bank or lending institution about what bridging finance options are available. They will be able to tell you about the terms and conditions of each type of loan, as well as how much money you can borrow.
3. Compare the different bridging finance options available to you. Make sure you understand the terms and conditions of each offer before signing up for one
What to consider when choosing a bridging finance provider
Choosing the best bridging finance provider for your first time homebuyers can be a daunting task. With so many options available, it can be hard to know where to start. Here are some tips to help you choose the best option for you:
1. Ask around – Talk to your family, friends, and colleagues about their experiences with bridging finance providers. Chances are, someone you know has used one of these services in the past and can give you valuable advice.
2. Do your research – Before choosing a bridging finance provider, do your research. Find out which companies offer the best rates and terms, as well as whether they have any history of delivering on their promises.
3. Beware of high-interest loans – Many bridging finance providers offer high-interest loans that can quickly add up. Make sure you understand the terms of any loan you’re considering before signing on the dotted line.
4. Get pre-approved – Before applying for a bridging finance loan, make sure you have pre-approved by your bank or lenders. This will speed up the process and ensure you don’t have to go through the full lending process twice.
When it comes to bridging finance for first time buyers, there are a number of options available. Some lenders will allow you to put down as little as 5%, while others will offer lower rates if you have good credit history or have worked in the property sector before. Whichever route you choose, make sure to research the various options available and find one that is best suited to your needs. By taking the steps necessary to ease your way into the property market, you can be sure that you’ll be able to purchase your dream home sooner rather than later.