What are bridging loans
Bridging loans are a short-term funding available to most consumers. Bridging finance is used to 'bridge' the gap between a repayment of debt due and the new finance applied becoming available for use. Bridging acts like a short-term cash injector to help avoid losing a desirable specific purchase, e.g. a new home.
Bridging loans can help you as you wish to buy your property at an auction. As you may be aware, buying properties in an auction requires immediate finance to hold the property when you win. Normally, a 6-7% deposit is needed upon winning the property auction and you may have a 1-month timeframe to complete the purchase. Property auctions are fast moving and you may save a lot on the price compared to buying from private sellers or agents. Direct mortgage lenders may require your property to be in a habitable state before they can offer the mortgage. Most of the time, property auctions auction homes that may need refurbishment in order to satisfy the lender's criteria to lend. Therefore, bridging loans will help you with this.