| | - As with most type of loans, first charge bridging loans offer a high variety of options and advantages and disadvantages of course. It is always important that you get the highest value available on your property so that you have at least flexibility in your options.
- You are a homeowner and you need fast cash so you turn to the lender to give you a bridging loan. It may sound simple, but in fact it is not that easy to put your home at risk of repossession in case you cannot make the repayments. Having a loan secured by first legal charge against your property in plain words means that the lender who gave you the loan becomes the primary authorized person to ask for your home to be sold in case you miss your payments.
- It can be said that first charge bridging loans are a risky business, especially when you have some other debts that are secured against the home too. It becomes like a competition on who will become the first to “win” the rights over your property. This is the real estate market, and if you do not fully understand the whole process in general than there is a great probability that you become a victim. It is very important to make your own financial planning even before getting involved with any lenders. This means that you put down all your debts starting from credit card debt and all other debts especially secured ones, pull the line and calculate whether a first charge bridging loan is really in your advantage or not.
- You have to know that bridging loans are given both to individuals and companies, and many times they do not take it into account if you have a history of bankruptcy, if there was a County Court Judgment released in your name, or if you went through an Individual Voluntary Arrangement. Also, as a backup you are let to use everything from a residential property, land, retail shops or even auction properties and offices.
- Many lenders put an emphasis on the fact that they require a first charge to be put on one of your properties in order to accept the loan. Sometimes an additional charge on the other property (which may be a first or a second charge, depending on their criterias) is also necessary . That is why it is very important to thoroughly examine the operating procedure of the lending institutions, so that there won’t reach you any surprise along the way.
- Lenders always offer less than the real market value, depending on the property but the average is between 65-85% at the most that you can get. There are always exceptions of course and if you are lucky you might close a convenient deal for you. So, practically lenders become sort of assured this way, and the worst that can happen to you is the best that can happen to them: repossession.
- It is advisable to take into consideration other eventual extra costs like valuation fees, solicitor undertakings or any other payment. Legal advice is always a pro in cases where you are not sure what to do, or how you should act because you have to know you rights prior to anything else. Surely first charge is the best guarantee and the quickest solution for you to get a first charge bridging loan, but this doesn’t mean you have to run and get it this very moment. Make sure you understand all the repercussions in case of failure and act accordingly!
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