Q1. What is a Bridge Loan?
It has been quite a long time since investors and developers have been applying bridging loans– as this type of financing makes them acquire properties instantly and offering competition in the property development industry.
Q2. What is the term length of the loan?
Q3. Why would someone want to use a Bridge Loan?
Q4. What are the cases when financing a commercial mortgage bridge loan is best suggested?
- When purchasing a property without finalizing the sale of your own property.
- When constructing a property with the intention of selling the property.
- When looking to fund sudden business expenditure.
- To be cleared instantly with the arrival of lump sum pension payments.
- Building a new start- up enterprise right from its roots.
- When intending to revamp real estate.
Q5. What are the requirements of getting commercial mortgage bridge loans?
Secondly, lenders would also like to check the type of collateral provided. Commercial mortgage lenders would actually check the current value of the property, the future value of the property after repair and the probability of the value of the property being appreciated.
Q6. What happens if I can’t repay my bridging loan when the term finishes?
Initially, the lenders of the above kind of finance will ask the borrower how to repay the above debt- which is the exit strategy. The above kind of finance will not be lent right at the beginning if there is no clear exit strategy. Common exit strategies include selling an [existing] property or even a refinancing strategy- the former being the most appropriate type of exit strategy. Credit checks may need to be approved by lenders if they see that the borrower may resort to the above financing to clear away any long- running financial debts.