Bridging Loans Explained

Published on: 07 May 2021 Last Updated on: 02 January 2025

Bridging loans have become popular among borrowers for all the right reasons. With everyone talking about bridging loans, including the mainstream media, the chances are that you have already heard of these loans before.

This is especially true if you are trying to move houses. However, several people do not know what a bridging loan is and how it works.

Taking a bridging loan could be the best thing to do if you have found a dream house you want to acquire before someone else buys it, and you are yet to find a buyer for your existing home, which still has a mortgage.

A bridging loan will give you the funds you need to buy the second house as you wait to sell the current one. Even so, there is so much more to bridging loans than you might imagine.

In this guide, we will discuss everything about bridging loans from the basics, pros, and cons. keep reading to discover everything you need to know about bridging loans.

So what exactly is a Bridging Loan?

Simply put, a bridging loan is a short-term loan taken on top of the current home loan. As the name suggests, a bridging loan is usually taken when you need to buy a new house immediately before selling your existing home. When you take this loan, you will be paying interest on two loans.

To put things into perspective, bridging loans are a form of interest-only loans.

The value of your existing property will determine the value of the loan. It is also vital to note that these loans have limited terms and contain special concerns. Depending on the lender, the amount and terms of the loan will vary. You can view this bridging loan calculator first before you apply for the loan to get a glimpse of your financial responsibilities.

The structure of bridging loans differs from one private money lender to another. Some private lending providers will require you to continue serving your loan until you settle in your new property. The private finance providers will the interest of your two loans together during the loan duration.

Once you find a buyer for your second property, the mortgage will be discharged. You will then start paying the principal and interest of your current loan. On the other hand, other private lending providers will ask you to service both loans after taking a new one.

After the sale of your home, the initial mortgage will be discharged, while the bridging loan might be converted into the home of your choice for your new property.

When taking a bridging loan, it would help to think about compounding interest because you will be charged for both loans. Always keep in mind that you will end up paying more than you should if you fail to find a buyer for your house quickly. Bridging loan interests are calculated daily and charged monthly.

Another key element you should have in mind is the duration of the bridging loan. These loans usually last around six months to 12 months, depending on the private finance providers and your preferences. Your loan length will be six months if you buy an existing home and 12 months for a new one.

What are the Pros and Cons of a Bridging Loan?

Now that you are aware of what a bridging loan is and how it functions, it is time to look at the pros and cons. Understanding the benefits of these loans and the challenges you are likely to encounter when you take a bridge loan will help you make the right decisions. Here are the pros and cons of a bridging loan:

The Benefits of a Bridging Loan:

Bridging loans have so much to offer. It is crucial to understand what you should expect with this type of loan to get the best options. Here are the pros of bridging loans:

More Convenience:

Do you want to buy your dream home quickly? A bridging loan will allow you to do just that even if you have not sold your existing house just yet.

Flexible Repayments:

Depending on your bridging loan structure, you will only have to service your existing home loan finance when you take a bridging loan.

Avoid Further Expenses:

You will not have to rent when you take a bridging loan. It will allow you to move even if you do not have a buyer for your house.

Considerations of a Bridging Loan:

Like is the case with any other type of loan, bridging loans also have their fair share of cons. For instance, you will be forced to pay more if you fail to sell your house as soon as possible.

Choosing the Best Bridging Loans for Your Needs:

Bridging loans are categorized as open bridging loans and closed bridging loans. Closed bridging loans have a pre-determined settlement date while open bridging loans do not have an agreed settlement date.

When looking for a bridging loan, it will help to consider the duration, interest rates, and loan structure. It would also help to compare alternative loans before making the final decision.

Above all, it is essential to find the right private lending company. Fortunately, you can use an easy-to-use online platform such as ADS.finance to find the best private finance option near you.

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The Benefits Of Exclusive Listing For Sellers

In real estate, an exclusive listing is a contract between a real estate agent and the owner that grants the agent the exclusive right to sell the property. The realtor will handle the listing for you without submitting it to the multiple listing service. In most cases, the agent will promote the property to prospective buyers and handle everything regarding the sale. The real estate agent will act as the owner’s sole agent. Only one agent will be appointed and expressly authorized to refer the property to potential buyers. On the other hand, in a non-exclusive listing, the owner retains the right to use any number of agents. You can click here to learn more about exclusive vs. non-exclusive listings and the pros and cons of exclusive listing. In this article, we will focus only on the benefits of exclusive listings for sellers and why this might be the best way for you to sell your home. Let’s dive in! Longer-Term Working Relationship With The Agent You are more likely to develop a genuine working relationship with a single real estate agent. Because your agent will be fully responsible for the sale, they will probably be more motivated to close the deal than open listings. In addition, your agent will put in more effort on your behalf: they will develop personalized marketing strategies to help your property stand out. As your relationship develops, your exclusive agent will make strategic recommendations regarding advertising, marketing, and even renovation strategies to attract higher prices. On the other hand, if your home is listed on the MLS, the public will be aware of your initial price and will be notified whenever you change it. However, with an exclusive listing, the agent can control who can access pricing. High-Quality Offers Your agent will work closely with you to ensure that you get the best price for your property. As mentioned, they may even recommend renovations if they are sure that renovating will pay off by increasing the cost of your property. In addition, they will devise powerful advertising strategies for you to attract higher bids. And exclusive listings typically receive more offers since many believe that non-exclusive listings indicate something wrong, even if there is not. And since people have more trust in an exclusive listing, they are more likely to pay more. In addition, your exclusive agent will spend more time choosing the best clients so they can get the best offer. Also, this eliminates the long negotiation processes with many offers, counter-offers, etc. The agent will put effort into structuring worthwhile offers for you. Read Also: What are the Best Real Estate Seller Leads? Exclusive Listings Attract The Right Buyers Open listing is more likely to elicit interest from more buyers, but this does not guarantee that the buyers are competitive or qualified. In non-exclusive listing situations, agencies keep the important property details private and show your home to as many clients as possible. So, the information about the property will usually be insufficient, resulting in your property being presented incorrectly to the wrong prospects. Even if the property is offered to potential buyers, these qualified prospects are given incorrect information. This is a significant benefit for exclusive listing. Because agents will market the property through their brokerage to a pre-chosen group of prospects, the clients will be more qualified, increasing the chances of a faster sale. In addition, an exclusive listing agreement will give agents the authority to approach the qualified buyers—those most likely to buy the property—openly and systematically. Privacy The reasons for selling a property can vary, from happy ones to reasons like someone passing away or a divorce. 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However, it is critical to work with a reputable and experienced agent to ensure that your property sells faster and attracts higher-quality prospects who will have better offers for your property. Read Also : How To Sell Your House Fast?! Five Must-Know Tips To Move Your Property! 6 Things You Must Know Before Selling Your Home Buying Or Selling A Home In Seattle?

5 Mistakes To Avoid In Estate Planning

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Under the Internal Revenue Service, it is integral to transfer your assets to heirs with the aim of creating the least possible tax burden on them. The right estate plan also saves families from falling apart. Just like a will, estate planning helps you choose your assets and finances in the right way possible. Finally, it can be said that estate planning safeguards beneficiaries. If you are the sole breadwinner of the family, there is nothing to worry about, even if something happens to you. But for that, you will first have to curate a properly structured and evenly distributed estate plan. What 5 Mistakes Must Be Avoided In Estate Planning? It is good that you have come up with an exclusive strategy. But is that all to make things work? After all, you are risking your entire life’s savings in this endeavor. So, here I am listing down 5 mistakes that one must be devoid of at the time of estate planning: 1. Procrastination: One of the most common estate planning mistakes is simply procrastinating. It is easy to put off creating a comprehensive estate plan, especially when you are focused on the present. Life can bring unexpected twists, and a thoughtfully crafted estate plan can offer you and your loved ones a comforting sense of security. It is never too early to start estate planning, so regardless of age, taking action now ensures that your assets are protected, and your intentions are clear. A well-structured estate plan can alleviate the cloud of uncertainty about the future of your assets and the well-being of your loved ones. 2. Neglecting Regular Updates: Estate planning is not a one-and-done process. Life is constantly changing, and your estate plan should reflect those changes. Failing to update your plan can lead to unintended consequences. Major life events such as marriage, divorce, the birth of children, the acquisition of new assets, or changes in financial circumstances all warrant a review and, if necessary, an update to your estate plan. Without consistent evaluation, your assets may not be distributed as you intended. You update things like your phone, car, and closet without hesitation. Why neglect something as valuable to you and your family as your estate? 3. Inadequate Consideration of Taxes: Failing to incorporate tax sensitivity into all areas of your wealth management strategy will inevitably diminish the impact of your estate and the eventual assets available for your intended beneficiaries. Consulting with a knowledgeable wealth management advisor can help you navigate the complexities of tax planning and ensure that your estate is as tax-efficient as possible. It’s also important to consider what state you’re establishing trust in. For example, Nevada is one of the most trust-friendly states. It offers strong tax benefits, asset protection, trust longevity, and flexible decanting provisions. 4. Overlooking Beneficiary Designations: Many assets, such as retirement accounts, life insurance policies, and bank accounts, allow you to designate beneficiaries. These designations supersede instructions in your trust. It is crucial to review and update these beneficiary designations regularly to ensure they align with your current intentions. Failing to do so can lead to unintended consequences, such as assets going to a former spouse or someone you no longer wish to benefit. Oftentimes, emotions get roped into our decision-making processes, leading to impulse decisions or skewed perceptions. It is also important to think about the long-term effects of your beneficiary designations, considering every possible scenario. Having a third party like a wealth management firm help you with this process can prove to be extremely advantageous. The third-party can either serve as your trustee or help advise the trustee to make objective decisions and look after the estate and family. In either scenario, a wealth management company helps create a neutral, mutually beneficial relationship in the estate planning process. 5. DIY Estate Planning: Assembling a personalized wealth management team by handpicking lawyers, investment professionals, and other specialists may appear to offer a tailored approach to estate management. However, the effectiveness and cost-efficiency of this DIY approach are often outweighed by the advantages of partnering with a multifamily office. While individual experts bring their own strengths, a multifamily office excels in curating a team personalized to your needs and capable of seamless collaboration, ensuring that your financial objectives are pursued with synergy and precision. Multifamily offices are usually more cost-effective and time-saving as well, even providing family office services to help stay on top of the day-to-day expenses, documentation, and management for an estate. However, a good wealth management firm is also capable of working with outside experts, whether to account for a non-traditional area of need or comfort with a longtime and trusted source of counsel to prioritize your peace of mind. Conclusion Estate planning is a critical process that should not be overlooked or delayed. Avoiding common mistakes can help you create a robust estate plan that protects your assets and provides for your loved ones as you intend. Trust services, like those provided at Whittier Trust, are committed to assisting individuals and families in developing comprehensive estate plans tailored to their specific needs and goals. You are not in this alone. The right wealth management advisors are ready to help you create and maintain an estate plan that is designed just for you. Read Also: How Many Jobs Are Available In Real Estate Investment Trusts? Using Direct Mail To Build Trust With Real Estate Prospects How To Invest In Real Estate Business Dubai

Enhancing Seattle Properties with Custom Blinds

Interior decoration is not only about aesthetics but also functionality. Several factors like functionality, aesthetics, attention to minor details, and theme together create a space that elevates the ambiance through interior decoration. In this article, we focus on enhancing the functionality and aesthetics of windows using custom blinds at Seattle properties. We highlight how custom blinds can elevate your overall Seattle property aesthetics, giving it a unique look. This way, your space will get a comfortable and appealing visual that matches the surrounding interior theme. So, if you are looking to increase your Seattle property value with versatile aesthetics that appeal to your customers, try custom blinds in your interior design. How Custom Blinds Enhances Seattle Properties? Here's how custom blinds can enhance Seattle properties' value and aesthetics. Elevating Aesthetic Appeal Seattle is a testament to natural beauty with picturesque landscapes. You can enhance the beauty of your Seattle properties with Custom Blinds and Shades in Seattle that aligns with the natural beauty of the city. Using custom blinds that go with your interior design theme will elevate the aesthetics of your Seattle property. But when you incorporate your city's aesthetics with your property's interiors, this creates an elevated look. This helps increase the property's appeal to potential customers, and therefore, you can increase the pieces of the property. Since homeowners can harmonize their property's interior decor with scenic outdoors, creating a pleasant look for their homes. Everyone looks for a home that's functional and aesthetically pleasing nowadays and has an individual touch. So, it's your duty as a realtor to create properties that align with your customers' views. Here's where you can use custom blinds in your Seattle properties to complement each property theme based on its owner's preference. You can opt for sleek modern or traditional custom blinds to suit the interior decor of Seattle properties. With versatile, customizable blinds, you can seamlessly integrate architectural design and decor themes of interiors. From expansive floor-to-ceiling windows to cozy alcoves, these custom blinds can be the perfect solution to elevate any space's visuals. You will ensure the sophistication, functionality, and aesthetic appeal of any property using custom blinds. Maximizing Natural Light Seattle's reputation for overcast skies underscores the importance of maximizing natural light within interiors. Custom blinds effectively regulate sunlight, allowing residents to strike a balance between illumination and privacy. With adjustable slats or motorized controls, homeowners can effortlessly modulate light levels throughout the day, creating a comfortable environment conducive to relaxation and productivity. Enhancing Energy Efficiency In a city known for its temperate climate and commitment to sustainability, energy efficiency is a paramount consideration for homeowners. Custom blinds offer more than just aesthetic appeal; they are a practical solution for enhancing insulation and reducing energy consumption. By strategically selecting materials with insulating properties, such as cellular or honeycomb blinds, residents can mitigate heat loss during Seattle's chilly winters and minimize heat gain in the summer months. Promoting Privacy and Security Privacy is fundamental to residential comfort, particularly in densely populated urban areas. Custom Blinds and Shades in Seattle afford homeowners the luxury of seclusion without compromising on style. Whether drawn closed to shield interiors from prying eyes or partially opened to maintain a connection with the outdoors, these tailored window treatments empower residents to curate their desired level of privacy with ease. Custom blinds contribute to enhancing security by obscuring the view of valuables from potential intruders. By investing in quality materials and professional installation, homeowners can enjoy peace of mind knowing that their property is safeguarded against external threats. Tailored Solutions for Unique Spaces Seattle's diverse architectural landscape encompasses a spectrum of design challenges, from irregularly shaped windows to unconventional room layouts. Off-the-shelf blinds often must address these nuances, leaving homeowners with ill-fitting or cumbersome solutions. On the other hand, custom blinds offer tailored solutions that are meticulously crafted to fit the precise dimensions and specifications of any space. Whether navigating bay windows, skylights, or French doors, custom blinds can be customized to integrate with a property's architectural features seamlessly. This bespoke approach ensures a cohesive aesthetic and optimal functionality, elevating Seattle residences' overall appeal and comfort. Adding Value to Properties In a competitive real estate market, you can use custom blinds to enhance the valuation of your property. Most property owners are in search of unique real estates that have something unique to offer. If you are a realtor, then you are aware of how people pay attention to detail before making a purchase. So, using this opportunity to incorporate custom blinds into your Seattle properties interior decor to enhance the valuation. As Seattle property management, you can show the detail you have put into making the space welcoming and functional. Homes that use custom blinds exude sophistication and refinement, which impress potential buyers. Potential buyers appreciate the quality craftsmanship and attention to detail in your properties. If your potential buyers are looking for eco-friendly properties, then opt for custom blinds made of eco-friendly materials. This highlights the attention to detail and efforts put into the property to make it energy-efficient. If you are a homeowner looking to enhance your property's marketable value, then investing in custom blinds that go with your interior aesthetics is a great way to start. This way, your Seattle property's resale value increases. Streamlining Maintenance and Care in Seattle It is understandable that blinds need cleaning in regular intervals as it collects dust and debris in the environment. But how do custom blinds differ from any other blinds in the market that add value to your Seattle properties? You can highlight the necessity of custom blinds that streamline the maintenance and care of Seattle properties as Seattle property management. As custom blinds are made using durable materials, they can last longer, giving your money's worth, unlike other blinds. Again, custom blinds are made of easy-to-clean materials that will help you easily clean your blinds without damaging them. You not only benefit aesthetically and functionally but also ensure the blinds are worth your money with custom blinds. From moisture-resistant fabrics to antimicrobial coatings, the best quality materials are used to make custom blinds. This ensures your peace of mind as cleaning these blinds is low maintenance and hygienic. You can enjoy one less chore in your busy life when you opt for custom blinds for your Seattle properties. Conclusion As Seattle homeowners, you can elevate your home aesthetics with custom blinds that blend both form and functionality harmoniously. Your Seattle properties valuation also increases when you offer a sophisticated look to your properties interiors. These custom blinds enhance the comfort of the property with proper ventilation during all seasons. Thus giving your property a comfortable and cosy ambiance. From privacy to natural light, these custom blinds offer security and meet the diverse needs of homeowners in your Seattle properties. The versatility of custom blinds, therefore, continues to redefine our experiences with our living spaces. Thus elevating the space ambience and functionality of Seattle properties in the years to come. Additional Reading: Why Is Property Valuation Important For Sellers? What Is A Philadelphia Property Tax Reassessment? 7 Wise Financial Choices That Will Help You Follow Your Budget

Bridging Loans Explained

So what exactly is a Bridging Loan?

What are the Pros and Cons of a Bridging Loan?