Bridging Loans and Mortgages in the UK

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This is an informational article to answer the question: What is a bridging loan?

A bridging loan is a type of short-term credit, normally given for a period of a few weeks to several years pending the arrangement of larger or longer-term financing.  It is a quick financial security against land or property, sought after for a variety of reasons; emergency cash flow, purchasing at auction, debt repayment, etc.  In the UK, bridging loans are a popular way of acquiring and securing property.  Bridging is becoming ever more competitive in stark contrast to more traditional forms of finance.  Here is a great place to find out more information on a bridging loan in the UK.  Plenty of great information and guides to help make your decisions easier to understand and smooth the process of meeting your financial needs.

Mortgages are mainly used for buying homes and property but are also used to secure businesses and assets too. Their interest rates tend to be lower than bridging loans but can still work out just as pricey because of how long the loan lasts. You’re also able to decide which type of mortgage that you want, which is something that you’re unable to do with a bridging loan.  A mortgage is designed to be a long term repayment plan, which can last for several years. While it is also somewhat based on your affordability, you have more liberty due to the length of the payment schedule. They’re also non-secured, meaning that you can get needed support if you’re suddenly unable to make back the full payments. This gives you another secure net against the unknown, and ensures that you’re able to deal with your finances in a way that ensures you’re still able to survive and don’t have to worry so much about it affecting your future credit.

Photo credit: Got Credit

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