Find the most competitive bridging loan

A bridging loan is a usually a large sum of money borrowed over a short period. Usually a bridging loan is used to cover shortfalls between buying one property and selling another; or to cover businesses between funding tranches

Most people turn to bridging loans when something holds up a property transaction. The typical scenario is a person has found their ideal home, and had their offer accepted, but there is just one snag - they've been unable to sell their current house quickly enough and the deal is in jeopardy of falling through.

Bridging finance can provide a solution by giving buyers who have an imminent purchase the funds to complete without having to sell their current property.

There are two variations of bridging finance: the 'closed' bridge and the 'open' bridge.

A closed bridge is available to homebuyers who have already exchanged on the sale of their existing property. Statistically only a small numbers of sales fall through after exchange, so lenders are willing to offer closed bridge financing. From their point of view, the risk is minimal.

An open bridge is taken out by buyers who have found their ideal property, but may have not sold or indeed put their existing home on the market. In this situation, a bank will ask various questions and will require supporting information. Usually there will need to be a reasonable level of equity in their existing property.

Time is of the essence when it comes to purchasing a property at auction and winning bidders can use bridging loans to meet the 28 day deadline for completion set by all auction houses in the UK. When the property transaction has been finalised, you can then remortgage in order to repay the bridging loan.