Don’t we all just love perks? Who doesn’t anyway? It’s no surprise that people would always gravitate to things that would add value to their plate. It’s a primal instinct. We do away with danger and cling to what’s comfortable and advantageous. The same is true when it comes to the business of real estate. Whether you’re in it for the profit or for personal reasons, it’s something we’re bound to come across at least once in our lifetime. Speaking of which, have you ever wondered who benefits from bridging loans?
Also known as bridging loans, this form of short term finance acts on the interim. This means that it serves as a connection between immediate needs and the main means of funding. In majority of cases, it is used to provide for pre-purchase costs necessary to make the acquisition possible such as research expenses, professional fees, security deposit and down payment to name a few.
Because real estate purchases cost quite a lot, investors need ample time to gather their financial resources. But because the market is highly competitive, it puts a lot of people at a disadvantage especially when their main source is not yet ready and the asset they’re eyeing on is also of interest to others. By now, we all probably know that the first buyer who drops the security deposit and down payment almost always gets the property. Now with such type of financing, who gets the most benefit?
- Investors/Landlords – For the business-minded who engage in the trade and/or leasing of properties, it becomes a stepping stone. Investors and landlords would want to expand and improve their investment portfolios and this is a tool used in its accomplishment. Surely they’d want the best assets but the prime ones are always at a competitive edge with everyone wanting to grab hold. With property bridging finance, investors and landlords get the chance to reach the finish line first even if their credit application or resource pooling is still being processed.
- Residents – A lot of individuals and families buy their homes by putting the current up for sale or applying for some type of credit like a bank loan or a mortgage. Both instances take a lot of time which can hamper the moving process and become a disadvantage. To hasten things up and be able to provide for the upfront costs, bridging loans are used. Once the sale of the current asset is closed or the credit has been approved, they are then used to pay for the bridge as well as the remaining balance of the property.
- Businesses – Others make use of a bridging loan to acquire assets for their business operations. Such is the case for a good majority of companies. Because time is of the essence and waiting isn’t exactly an option, it becomes a means to quicken the pace. More on loans at http://www.alternativebridging.co.uk.