Open bridging Loans


             


                Tel: 0800 288 9044
          Email: enquiry@bridgingfinance4u.co.uk


An Open Bridging Loan is defined as a bridging loan where a guaranteed repayment option or the date of repayment is not clearly defined. For instance you may have put your house on the market but have not as yet received an offer, so it is impossible to define exactly when you house may be sold and the bridging loan repaid.

Because of the uncertainty, this type of bridging loan is viewed as a higher risk form of lending than closed bridging loans and hence the interest rate and fees charged by the open bridging loan lender are normally higher. i.e. it is a higher risk, higher cost form of lending.

Example:
Your existing residential property is on the market for sale, but as yet has not been sold. A highly desirable property has come up for sale, your ‘dream home’, and you realise that if you wait the likelihood is that someone else will acquire it. In this situation an open bridging loan is a form of bridging finance which can be used to release the equity in your existing property for a short term period, enabling you to purchase the new ‘dream’ property. The bridging loan is then repaid on the sale of your existing property.

Open Bridging Loans are an intrinsically risky form of financing, and it is important that you understand and are willing to accept the risks involved and have exhausted all other financing options. It is important to balance the potential gain against the risk you are taking before moving ahead.

We recommend that you seek independent legal advice before proceeding with any form of bridging finance, to ensure that you clearly understand the risks and the consequences involved.